U.S. stock markets continued their rally during the trading period July 25-31, but this time the resource stocks caught up, and actually outperformed the broader market. The Standard & Poor’s 500 index rose 15.75 points, or 1.2%, to 1,276.66. One of the drivers of the rally was an economic release noting slower growth — an annualized 2.5% — in the U.S. economy in the second quarter of the year, supporting the growing opinion that the Federal Reserve will stop increasing interest rates, but that economic growth was in Goldilocks territory, neither too hot nor too cold.
The inference that the Fed would stop tightening and the U.S. dollar would weaken in response proved to be good for gold, as well. Bullion prices were up US$26.80 during the period, to US$632.50 and the Philadelphia Gold and Silver index (the XAU) rose 6.19 points to 141.85, a gain of 4.5%. Among the larger gainers were Lihir Gold, up US$2.12 at US$43.15 and Minas Buenaventura, up US$2.65 at US$29.11. White-goods producer Anglo American Platinum, which reported earnings of US$715 million for the first half of 2006, on revenue of US$2.6 billion, rose US$11.05 to US$102.50.
The coal stocks were all over the board; Peabody Coal, with 22.5 million shares moving, rose US$4.25 to US$49.90, and Arch Coal rose US$4.53 to US$37.94. But in the same period Massey Energy fell US$2.80 to US$26.72, Foundation Coal fell US99 to US$38.14, and Alpha Natural Resources touched a 52-week low of US$15.25 before rallying to close at US$16.17.
The big gainer among base metal stocks was Southern Copper, which was up US$12.76 at US$96.50. Reports suggested Southern and Grupo Mexico may be planning a bid for Phelps Dodge, which was up US$10.66 at US$87.34 on volume of 22.8 million shares. Here is the thinking: Inco’s abandonment of its bid for Falconbridge means Inco and Phelps, with no operations in common, will find no mutual benefits in their proposed business combination and let it drop. Inco will then be prey to Teck Cominco’s takeover offer, and cash-engorged Phelps will be in the sights of other copper producers whose sales pitch to Phelps shareholders will include a big cash distribution.
U.S. greatest percentage change
| VOLUME(000s) | HIGH | LOW | CLOSE | CHANGE | ||
| Colombia Gldf* | CGDF | 1301 | 1.42 | 1.01 | 1.42 | +40.5 |
| Grand Cen Sil* | GSLM | 17 | 0.90 | 0.60 | 0.90 | +38.4 |
| Shoshone Silv* | SHSH | 71 | 0.22 | 0.16 | 0.22 | +37.5 |
| Fischer-W Gld* | FWGO | 63 | 0.09 | 0.07 | 0.09 | +28.5 |
| Alberta Star * | ASXSF | 445 | 1.52 | 1.20 | 1.47 | +24.5 |
| Metalline Mng* | MMGG | 712 | 3.29 | 2.68 | 3.22 | +19.7 |
| Miranda Gold* | MRDDF | 197 | 1.48 | 1.20 | 1.466 | +17.2 |
| Apolo Gold* | APLL | 589 | 0.135 | 0.11 | 0.13 | +17.1 |
| Peru Copper* | CUP | 714 | 4.87 | 4.04 | 4.83 | +16.6 |
| Southern Peru* | PCU | 5556 | 97.75 | 85.19 | 96.50 | +15.2 |
| Brookmount Ex* | BMXI | 12 | 0.105 | 0.075 | 0.075 | -31.8 |
| El Capitan Pr* | ECPN | 1645 | 2.02 | 1.38 | 1.67 | -19.3 |
| Cream Mnrls* | CRMXF | 77 | 0.485 | 0.35 | 0.406 | -18.4 |
| Diamond Discv* | DMDD | 606 | 0.018 | 0.015 | 0.015 | -16.6 |
| New Jersey Mg* | NJMC | 28 | 0.69 | 0.60 | 0.60 | -13.0 |
| Douglas Lk Ml* | DLKM | 56 | 1.35 | 1.10 | 1.15 | -12.8 |
| Halo Res* | HLOSF | 45 | 0.334 | 0.301 | 0.301 | -11.4 |
| Massey Energy* | MEE | 15403 | 30.60 | 23.75 | 26.72 | -9.4 |
| Campbell Res* | CBLRF | 71 | 0.16 | 0.13 | 0.145 | -7.6 |
| McKenzie Bay* | MKBY | 289 | 0.30 | 0.24 | 0.26 | -7.1 |
U.S. greatest value change
| VOLUME | CLOSE | CHANGE | ||
| Southern Peru* | PCU | 5555600 | 96.50 | +12.76 |
| Phelps Dodge* | PD | 22827600 | 87.34 | +10.66 |
| Rio Tinto* | RTP | 1127300 | 208.89 | +9.21 |
| Teck Comin B* | TCK | 225900 | 66.12 | +7.97 |
| Potash C Sask* | POT | 4610400 | 94.50 | +6.91 |
| Inco Ltd* | N | 9249000 | 77.77 | +5.64 |
| Soc Quim&M Ch* | SQM | 94500 | 107.51 | +5.05 |
| Arch Coal* | ACI | 15750000 | 37.94 | +4.53 |
| Peabody Enrgy* | BTU | 22508000 | 49.90 | +4.25 |
| Freeport McMo* | FCX | 13410200 | 54.56 | +3.56 |
| Massey Energy* | MEE | 15402800 | 26.72 | -2.80 |
| Foundatn Coal* | FCL | 8073100 | 38.14 | -0.99 |
| El Capitan Pr* | ECPN | 1645223 | 1.67 | -0.40 |
| Meridian Gold* | MDG | 3277000 | 27.02 | -0.34 |
| BHP Billi-BBL* | BBL | 157700 | 38.14 | -0.26 |
| Douglas Lk Ml* | DLKM | 56050 | 1.15 | -0.17 |
| Crested Corp* | CBAG | 35600 | 1.95 | -0.13 |
| BHP Billi-BHP* | BHP | 8475400 | 42.20 | -0.12 |
| Alumina Inc* | AWC | 85000 | 19.53 | -0.11 |
| Kimber Res* | KBX | 106300 | 2.20 | -0.10 |
U.S. most active issues
| VOLUME(000s) | HIGH | LOW | CLOSE | CHANGE | ||
| UNICO Inc* | UNCN | 265814 | 0.002 | 0.001 | 0.002 | 0.00 |
| AuGrid* | AUGC | 177445 | 0.00 | 1.0E8 | 0.00 | 0.00 |
| Goldspring* | GSPG | 29839 | 0.011 | 0.009 | 0.01 | 0.00 |
| Phelps Dodge* | PD | 22828 | 88.32 | 76.20 | 87.34 | +10.66 |
| Peabody Enrgy* | BTU | 22508 | 51.33 | 43.80 | 49.90 | +4.25 |
| Newmont Mng* | NEM | 19220 | 53.05 | 50.15 | 51.23 | +0.21 |
| CVRD* | RIO | 17435 | 23.87 | 22.00 | 23.20 | +1.06 |
| Alcoa* | AA | 17284 | 30.25 | 29.17 | 29.95 | +0.21 |
| Arch Coal* | ACI | 15750 | 39.55 | 32.28 | 37.94 | +4.53 |
| Massey Energy* | MEE | 15403 | 30.60 | 23.75 | 26.72 | -2.80 |
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