Mid-morning report: stocks fall ahead of Fed’s statement

Stockhouse Editorial
0 Comments| October 30, 2013


The TSX composite was lower, falling 9.11 points to 13,431.50 in mid-morning trading on Wednesday. The Dow was down 15.48 to 15,664.87, while NASDAQ slipped 4.25 to 3,948.08.

Pacific Potash Corp. (TSX: V.PP, Stock Forum) lost 30.8% to nine cents after the potash focused exploration and development company entered into a non-binding memorandum of understanding (M.O.U) with a Chinese State Owned Enterprise (S.O.E). The M.O.U outlines the proposed terms of a transaction pursuant to which the S.O.E will subscribe for $10 million by way of an unsecured convertible debenture of common shares from Pacific Potash convertible at a price of $0.37 per common share. The S.O.E's aggregate beneficial ownership of common shares will not exceed 19.9% of the issued and outstanding common shares of Pacific Potash at the time of exercise of these conversion rights. The convertible debenture shall bear interest at the rate of 5.0% per annum, payable semi-annually and shall mature on the date which is two years from the date of issuance. Upon completion of this financing Pacific Potash will have raised a total of $16.35 million year to date to drive the company's business plan. The proceeds from the convertible debenture will be used for development of Pacific Potash's Amazonas Basin Potash exploration program, consisting primarily of drilling, and for general working capital.
 
Stocks fell as investors awaited the Federal Reserve’s decision on stimulus and assessment of the economy. The Federal Open Market Committee concludes a two-day monetary-policy meeting today.

A private report today based on payrolls showed companies added fewer workers than projected in October, indicating the U.S. job market lost momentum amid the budget strife.

The Labor Department will release its monthly employment report for October on Nov. 8, a week later than initially scheduled because of the shutdown.
 
A separate report today indicated the cost of living in the U.S. rose as projected in September as fuel charges climbed, capping the smallest year-to-year gain in five months. Inflation has been running below the Fed’s 2 percent objective in the near-term, giving policy makers room to maintain monetary stimulus.

The price of gold gained US$17.70 to US$1,354.10 an ounce, while silver climbed US$0.40 to U$22.99 an ounce.

Tags: BANKS - GLOBAL

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