Falling prices for crude oil weighed on energy stocks, but a surprisingly strong jobs report buoyed the Dow Jones Industrial Average and the S&P 500 Index, which posted their seventh weekly advance. November payrolls rose by 321,000 in the largest increase in almost three years, while the unemployment rate remained at 5.8%, the lowest in six years. The Dow climbed 0.7% to 17,958.79 and the S&P 500 posted a 0.4% gain to 2,075.37. The Philadelphia Gold and Silver Index advanced 2.6% to 70.15.
Potash Corp. of Saskatchewan climbed 62¢ to US$35.38 per share. At an investor day seminar on Dec. 1, the company said it would aim for 2016 cost savings of $20-30 per tonne from 2013 levels. The company reported that it has finished 95% of its decade-long $8.3-billion potash-expansion program, and does not plan more potash projects. It will prioritize high-return nitrogen brownfield projects and expects higher netbacks, given better pricing in most markets through 2014.
Rio Tinto fell US$1.31 to US$45.29 per share. At its investor day on Dec. 4, the company said it plans to “materially” increase cash returns to shareholders from February 2015. It reported that total capital expenditure is below the US$8.5-billion forecast for 2014 and down 34% year-on-year; operating and exploration costs will be reduced by US$5.4 billion by the end of 2015 (compared with 2012); and US$3.5-billion worth of divestments have been completed since 2013. The company has achieved its “debt target of mid-teens” and is adopting a net-gearing, ratio-based target range of 20–30%. In its copper division, Rio Tinto expects average compound copper-equivalent growth of more than 5% between 2013 and 2019, and in its iron ore division, says its 2013 expansion plan in the Pilbara is in “full swing,” and “being achieved at an average mine production capital intensity of US$9 per tonne.”
BHP Billiton’s shares fell US$1.25 to US$50.38. BHP announced that the company it plans to create through its proposed demerger will be called South32. Most of South32’s assets would be in the southern hemisphere, and its regional centres would be Australia and South Africa. The demerger is to be completed in the first half of 2015.