US stocks climb, March 14–18

The U.S. Federal Reserve’s decision to cut interest rate hikes this year due to a weak global environment helped lift U.S. indexes. The central bank held its benchmark interest rate at 0.3% to 0.5%, but projected two quarter-point hikes this year, down from four in December. The Dow Jones Industrial Average rose 2.3% to 17,602.30 and the S&P 500 Index climbed 1.4% to 2,049.58. The Nasdaq edged up 0.9% to 4,795.65 and the Philadelphia Gold & Silver Index surged 4.5% to 71.18, as spot gold added US$4.90 to close at US$1,255 per oz. Crude oil rose 2.4% to US$39.44 per barrel, while the U.S. Dollar Index fell 1.2% to 95.06.

First Majestic Silver added 17% to finish at US$6.73 per share. The Mexico-focused silver producer said it would extend its share repurchase program by a year to March 16, 2017. Under the program, First Majestic intends to buy up to 7.8 million shares on the open market, or 5% of its total shares. First Majestic did not repurchase any shares for cancellation under its normal-course issuer bid, which expired on March 12, 2016.

Peabody Energy plunged 62%, or US$4.05, to US$2.50 per share on bankruptcy concerns. On March 16, the coal miner revealed it missed US$71.1 million in interest payments due the day earlier on its senior notes, triggering a 30-day grace period. It said that if it could not obtain other sources of capital, it might file for Chapter 11 bankruptcy protection.

Freeport-McMoRan was the most traded, on no news. The stock climbed US$1.21 to US$10.76, as 258 million shares changed hands. In February, Freeport agreed to sell a 13% interest in its Morenci joint venture to Sumitomo Metal Mining Co. for US$1 billion in cash. The deal should close by mid-2016.

Franco-Nevada topped the value-gainers’ list, advancing US$4.26 per share to US$65.64. On March 10, it reported record 2015 gold production of 360,070 equivalent oz. gold and US$444 million in revenue. Last year’s adjusted earnings per share were US57¢, down from US91¢ in 2014. This year Franco-Nevada is guiding gold-equivalent production of up to 445,000 oz. and revenue topping US$25 million from its oil and gas assets. By 2020, the miner expects to produce 520,000 equivalent oz. gold, and up to US$45 million in oil and gas revenue.