US equities post marginal gains, Oct. 9-15

 A slowing global economy pushed U.S. industrial production down 0.2% in September, following a 0.1% drop in August, while producer prices slid 0.5% last month, the largest drop since January, and retail sales rose just 0.1%. The disappointing economic data along with mixed earnings and declining commodity prices renewed expectations that the Federal Reserve will delay raising interest rates. The Dow Jones Industrial Average climbed 0.51% to 17,141.75 and the S&P 500 advanced 0.50% to 2,023.86. The spot price for gold gained US$44.40, or 3.9%, to close at US$1,183.40 per oz. and the Philadelphia Gold and Silver Index gained 6.21% to finish at 57.96.

Randgold Resources jumped US$4.20 to US$69.75 per share, posting the largest value gain of the trading period. The company reported that its Kibali gold mine in northeastern Democratic Republic looks set to exceed its 2015 production target of 600,000 oz. of gold. CEO Mark Bristow said the recent completion of the vertical shaft sinking, ahead of schedule, marked a major advance in the development of the underground mine, which will complement Kibali’s existing open-pit operation.

Teck Resources‘ shares dropped US53¢ to US$6.78 in the wake of a downgrade by Fitch Ratings. Fitch cut the mining company’s rating to BB+ from BBB-, the lowest investment-grade level. “With the slowdown in China, Fitch believes there is an elevated risk that metal and metallurgical coal prices will be lower for longer,” Fitch analyst Monica Bonar said in a note. The analyst also cited poor commodity prices, the company’s debt, and the capital it needs for its Fort Hills oil-sands project.

Freeport-McMoRan Inc. was the second most actively traded stock, falling 41¢ to US$13 per share. The company announced that it had “engaged in productive discussions” with the Indonesian government regarding its long-term operating rights and investment plans in the Southeast Asian nation. “The Government is currently developing economic stimulus measures, which include revisions to mining regulations to promote economic and employment growth,” the company said in a press release. “In consideration of PT-Freeport Indonesia’s major investments and prior and ongoing commitments to increase benefits to Indonesia, including previously agreed higher royalties, domestic processing, divestment and local content, the Government has assured PT-Freeport Indonesia that the Government will approve the extension of operations beyond 2021, including the same rights and the same level of legal and fiscal certainty provided under its Contract of Work.” Freeport’s portfolio of assets includes the Grasberg minerals district in Indonesia, one of the world’s largest copper and gold deposits.


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