Copper Price Lifts Mining Stocks
R.M. Schneiderman, 04.09.07, 4:17 PM ET
forbes.com
Call it the domino effect, only in reverse. On Monday, mining stocks rose, as the price of copper shot up, following the Labor Department's better-than-expected jobs report.
"It [the price of copper] has been strong...and then the jobs number that came out... [and gave] people the feeling that the economy is stronger than they were expecting," said Leo Larkin, an analyst for Standard & Poor's Equity Research.
On Monday morning, the Labor Department said nonfarm payroll increased by 180,000 in March, far better than the 135,000 Wall Street was expecting. The unemployment rate also slid to a five-month low of 4.4%.
That buoyed the price of copper, which in afternoon trading, was up 13 cents to $3.50.
In turn, mining stocks benefited from the rise, as shares of Freeport-McMoRan Copper & Gold (nyse: FCX - news - people ) jumped 2%, or $1.45, to $69, while shares of Companhia Vale do Rio Doce (nyse: RIO - news - people ) rose 1.1%, or 42 cents, to $40.17. Shares of Peru Copper (amex: CUP - news - people ) jumped 4.5%, or 66 cents, to $14.56, while shares of Southern Copper (nyse: PCU - news - people ) increased by 2.3%, or $1.69, to $76.55. Cameco (nyse: CCJ - news - people ) shares also moved upwards on the day, rising 1.7%, or 79 cents, to $46.94.
For roughly a month, copper prices have been especially strong as Chinese economic growth for the first two quarters were better than analysts expected, said Larkin
"China is going to be consuming more copper this year than last and maybe they will consume more than enough to offset what people think will be a decline in the U.S. because of lower housing starts," Larkin said.
Spring tends to be an especially auspicious time for the copper industry, as construction seasons gets under way and companies rebuild their inventories. |
