U.S. equities seek direction, Feb. 11-15

The S&P 500 index ended in positive territory for the seventh week in a row with a small gain of 0.12% to 1,519.79. The last time the index enjoyed a seven-week run was between December 2010 and January 2011. The other indexes didn’t fare as well, however, with the Dow Jones Industrial Average slipping 0.08% to 13,981.76 and the Nasdaq Composite falling 0.06% to 3,192.03. The price of gold tumbled US$57.10 per oz. to finish the trading week at US$1,610.10 per oz. and the Philadelphia Gold and Silver index dropped 5.59% to 143.90.

After cutting its dividend, reporting a fourth-quarter loss, and telling shareholders that it plans to issue nine million shares to raise funds to repay outstanding debt, shares of Cliffs Natural Resources plunged US$7.64 or 20.9% to US$28.85. The company slashed its dividend to 15¢ per quarter, down 76% from its previous dividend of 62.5¢. Cliffs reported a net loss in the fourth quarter of US$1.6 billion, or US$11.36 per share, down from a profit of US$185 million, or US$1.30 per share in the same quarter a year ago.

News that Barrick Gold is taking a US$3.8 billion hit on its Lumwana copper mine in Zambia sent shares of the gold miner down US$1.09 to US$31.63. Barrick received the property through its $7.3 billion acquisition of  Equinox Minerals in 2011. A new life-of-mine model for the operation shows higher-than-expected operating and sustaining costs, which means lower-than-expected production and profitability.

Shares of Intrepid Potash fell US$2.59 or 11.1% to US$20.68 after the company reported net income in the fourth quarter of US$14.5 million, or US$0.19 per diluted share, compared with US$24.9 million, or US$0.33 per diluted share in the fourth quarter of 2011.  

On the positive side of the ledger, Alpha Natural Resources gained US$1.25 per share or 15.1% to close the trading week at US$9.48. The coal producer reported that restructuring and cost-control measures have started to trim its cost of sales per ton. Total costs and expenses during the fourth quarter of 2012 came in at US$1.6 billion, compared with US$2.9 billion in the fourth quarter of 2011. Cost of coal sales in the quarter were US$0.9 billion, compared with US$1.6 billion in the year-ago period. The company reported a fourth-quarter net loss of US$128 million or US$0.58 per diluted share, compared with a net loss of US$793 million or US$3.62 per diluted share in the fourth quarter of 2011.



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