
Metals & Mining Winners: Freeport
NEW YORK (TheStreet) -- Encouraging U.S. manufacturing data appeared to give investors a reason to pour back into metals and mining equities during Monday's trading session.
Over the last several weeks, commodities-linked stocks retreated sharply as market players freaked over word from China that officials there planned to ease the nation's explosive economic growth by tightening credit. Chinese banks as well as the Reserve Bank of India hiked their reserve requirements in a bid to stem lending, slow down economic growth and avoid an asset bubble, accelerating the decline in commodities stocks.
Shares of
Freeport McMoRan
(FCX) - Get Report
, whose core metal found its way to China last year more than any other country, saw its shares lose nearly 21%
since the company reported quarterly results on Jan. 21
.
But on Monday Freeport shares led the mining and metals category into the green. The stock was changing hands in afternoon trading at $70.98, up $4.29, or 6.4%, on volume of 17.8 million shares. The three-month average daily turnover is about 14 million shares.
"We think the selloff exposed some
buying opportunities," said Mark Liinaama, the metals and mining analyst at
Morgan Stanley
(MS) - Get Report
in New York. Still, Liinaama said, stocks in the category will need to demonstrate "some validation" later in the week that they can hold onto the rally's gains before he can be confident that another dip in share prices doesn't lie ahead in the short term. (Long term, however, the Morgan Stanley house view calls for a sustainable recovery later in 2010 and into 2011.)
Triggering Monday's rally: December data
released by the Institute for Supply Management
signaling that factories in the U.S. have continued to shake off the grogginess from their long recessionary nap.
Market watchers interpreted the numbers -- the best reading in almost six years -- as firm evidence that the nation's manufacturing sector has moved solidly into a recovery phase. Such evidence would indicate, of course, that plenty of mined and refined raw materials will need to feed those factories.
U.S. stocks in general followed metals and mining shares higher Monday afternoon, with the
Dow Jones Industrial Average
gathering steam later in the session and adding more than 100 points.
Steelmaker stock prices also benefited from the manufacturing data. The sector was hit hard last week, too, but the selloff had less to do with China and more to do with a
from
U.S. Steel
(X) - Get Report
.
But the snapback in shares of the Pittsburgh manufacturing biggie was just as fierce as its mining brethren. U.S. Steel shares were trading recently at $46.73, up $2.30, or 5.2%, on heavy volume.
Among other steel names,
AK Steel
(AKS) - Get Report
gained 5.8% to $21.51,
Steel Dynamics
(STLD) - Get Report
added 5% to $15.94,
Nucor
(NUE) - Get Report
rose 2.6% to $41.84, and
Worthington Steel
(WOR) - Get Report
jumped nearly 6% to $15.32. Worthington on Monday announced that it had acquired the processed metals business of
Gibraltar Industries
(ROCK) - Get Report
for an undisclosed sum.
The big overseas iron-ore producers advanced sharply Monday. American depositary receipts of Brazil's
Vale
(VALE) - Get Report
and Australia's
Rio Tinto
( RTP) rose more than 5% apiece.
BHP Billiton
(BHP) - Get Report
gained 3.5%.
Among other U.S.-based mining and metals concerns,
Alcoa
(AA) - Get Report
shares added 3.8% to $13.22, while
Southern Copper
( PCU) leapt nearly 7% to $28.46.
Gold miner stocks also surged Monday as a weaker U.S. dollar
. Fears of an impending budget deficit of unprecedented proportions ($1.56 trillion, to be exact) weighed, in turn, on the U.S. dollar.
Among the gold majors, shares of Colorado's
Newmont Mining
(NEM) - Get Report
were up 5%, while Canada's
Goldcorp
(GG)
,
Barrick
(ABX)
and
Kinross
(KGC) - Get Report
saw their U.S.-listed shares advance by about 4% each.
-- Written by Scott Eden in New York
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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.









