Fertilizer Markets and Finance

NEW YORK (AP) — A growing belief that the U.S. economy may be headed toward recession gave the stock market its fourth straight week of losses.

The anxiety in the market was obvious Friday as the major indexes went from moderate gains early in the day to another sharp loss. The Dow Jones industrial average had its 10th move of more than 100 points in 15 trading days this month.

“We just don’t know whether we’re going to have a recession,” said John Burke, head of Burke Financial Strategies.

There was little news to help investors determine their next moves. However, JPMorgan Chase & Co. joined other financial firms and cut its forecast for economic growth during the fourth quarter. It’s now predicting growth at annual rate of just 1 percent, down from an earlier forecast of 2.5 percent. That added to the recession fears.

Investors disliked the news late Thursday that Hewlett-Packard Co. is planning to exit most of its consumer businesses, including PCs. HP fell 20 percent to a six-year low. HP plans to transform itself into a company that caters to corporations.

After the market rose early, some investors sold in case bad news comes out of Europe over the weekend. European investors were also cautious — banking stocks fell near two-and-a-half-year lows, dragged down by rumors about banks’ potential losses on bonds issued by heavily indebted governments.

“These things usually break out over the weekend and then you have a mad dash Monday to react to them,” said Mike McGervey, the head of McGervey Wealth Management.

The drop late in the day recalled the 2008 financial crisis. Then, many investors stepped up their selling in the afternoon out of fears about news that might break overnight — or on weekends. Lehman Brothers failed on Sunday, Sept. 15. The government took over mortgage companies Fannie Mae and Freddie Mac the previous weekend.

The Dow lost 172.93, or 1.6 percent, and closed at 10,817.65. It was down 4 percent for the week. Since July 21 — four weeks and one day — the Dow is down 15 percent.

Companies that rely on an expanding economy for higher revenue fell. Caterpillar Inc., International Business Machines and Alcoa Inc. each fell more than 2 percent.

The Standard & Poor’s 500 stock index fell 17.12, or 1.5 percent, to 1,123.53. It was down 4.7 percent for the week. All 10 industry groups that make up the index fell.

The Nasdaq composite fell 38.59, or 1.6 percent, to 2,341.84. It was down 6.6 percent for the week.

Although stocks fell, investors did not continue pushing the price of Treasurys, as they have the last three weeks. The yield on the benchmark 10-year Treasury note was almost unchanged at 2.07 percent, compared with late Thursday’s 2.06 percent. It had been up to 2.11 percent earlier in the day. The yield fell below 2 percent Thursday for the first time as heavy demand sent its price sharply higher.

Investors began the week confident after last week’s volatility, the worst the market has had since the 2008 financial crisis. The Dow rose nearly 215 points on Monday when Google, Time Warner Cable and Cargill were among companies announcing multi-billion deals. The market remained relatively calm the next two days. But on Thursday, a stream of bad economic news in the U.S. combined with worries about Europe’s debt problems and sent the Dow plunging 419 points.

Since July 21, the market has gone from one crisis to another, and the weakening U.S. economy has been at the heart of the selling. In late July, the concern was the debt debate going on in Washington. In early August, it was the downgrade of the U.S. debt rating by Standard & Poor’s. Since then, worries about the impact of the downgrade have faded, and growing evidence that the economy is slowing has driven stocks down.

Signs of a slower economy around the world have only made investors more pessimistic about the U.S. Earlier this week, Germany said its economy grew just 0.1 percent in the second quarter. And Germany is the strongest economy in Europe.

Stocks fell Thursday on news of another drop in home sales, weaker manufacturing in the mid-Atlantic states and an increase in the number of people who applied for unemployment benefits.

The stock market tends to reflect the expectations that investors have for the economy and company earnings six to nine months in the future. So traders are interpreting the numbers they’re seeing as part of a slide in the economy that will continue for some time.

Israel Chemicals Ltd. (ICL), which harvests minerals from the Dead Sea to make fertilizer, said second-quarter profit jumped 44 percent on higher potash and phosphate prices.

Net income rose to $426 million from $298 million a year earlier, ICL said in a PR Newswire statement today. Sales climbed 27 percent to $1.9 billion, beating analyst estimates, after the company consolidated results of two businesses it acquired in the first quarter, ICL said. The median sales estimate for the three-month period of five analysts surveyed by Bloomberg was $1.7 billion.

“They beat our expectations across the board,” said Joseph Wolf, equity analyst at Barclays Capital in Tel Aviv. Wolf said he expected the company to show strong results in the second half of the year on Indian and Chinese contracts and “in the absence of any real global macroeconomic issues.” Wolf, who spoke by phone, rates ICL “overweight.”

Potash producers are operating at or near record levels to keep pace with demand as surging crop prices spur farmers to use more fertilizer, Potash Corp. of Saskatchewan Inc. said in a July 28 report. ICL trades at 12 times estimated 2011 earnings, compared with a peer average of 13 times for 12 companies listed by Bloomberg.

A string of positive developments have lit a fire under North American potash stocks with Potash Corp. of Saskatchewan leading the charge.

The industry bellwether has made investors almost $5 billion richer since Tuesday after an Indian bid for Belarus’s state-owned producer valued that company at close to $30 billion. The news came after the EU’s largest player said its profits could jump 40% over the next six months and disappointing corn harvests in the US boosted demand for the soil nutrient.

Potash Corp. dragged higher the whole sector which also saw the listing of a potash from waste firm on Monday.

Potash Corporation of Saskatchewan, at $46.5 billion one of Canada’s most valuable companies, was trading up 0.7% shortly before the close on Monday after adding almost 11% since last Tuesday.

Stock in speculator favourite Allana Potash Corp which is advancing a project in the Danakil Depression, Ethiopia added just over 5% in heavy volumes on Monday brining its gains to 10% over the last five trading days. On Wednesday the company announced a new chair and that it is applying for a listing on the Toronto main board.

Western Potash has clawed back 20.4% since last Tuesday but is still down 10.9% on its TSX listing price of mid-July. The company is in the pre-feasability stage of its Milestone Project in south Saskatchewan where it hopes to mine almost a billion tonnes of potash using the solution mining method.

US-based Intrepid mirrored Potash Corp.’s moves and is up 8.3% over the last five trading days. The company owns five potash production facilities, three in Carlsbad, New Mexico and two in Utah and is worth some $2.32 billion on the NYSE.

The sector also saw a new listing – shares in Organic Potash Corporation which plans production of 40,000 tonnes potash from cocoa husk ash at a facility in Ghana commenced trading on the Canadian National Stock Exchange on Monday. Less than an hour before the close no shares had changed hands. Bids were for 10c.

Bloomberg reported on Thursday Germany’s K+S, Europe’s largest producer, has raised prices for potash for customers in Europe, its main market, six times since March 2010 and full-year sales will rise as much as 14% to between 5 billion euros to 5.3 billion euros, with net income gaining as much as 41%.

Livemint first reported on Wednesday that India is seeking to buy 20%–25% of Belaruskali, for as much as $7 billion after Russia’s Sberbank agreed to take 35% of Belaruskali as collateral for a $2 billion loan.

Unusually high temperatures across the US Midwest have damaged corn crops, prompting the USDA to cut its harvest forecast to 12.9 billion bushels (328 million metric tons) from 13.5 billion bushels projected last month.

NEW YORK (AP) — Gripped by fear of a new recession, the stock market suffered its worst day Thursday since the financial crisis in the fall of 2008. The Dow Jones industrial average fell more than 500 points, its ninth-steepest decline.

The sell-off wiped out the Dow’s remaining gains for 2011. It put the Dow and broader stock indexes into what investors call a correction — down 10 percent from their highs in the spring.

“We are continuing to be bombarded by worries about the global economy,” said Bill Stone, the chief investment strategist for PNC Financial.

Across the financial markets, the day was reminiscent of the wild swings that defined the financial crisis in September and October three years ago. Gold prices briefly hit a record high. Oil fell even more than stocks — 6 percent, or $5.30 a barrel. And frightened investors were so desperate to get into some government bonds that they were willing accept almost no return on their money.

It was the most alarming day yet in the almost uninterrupted selling that has swept Wall Street for two weeks. The Dow has lost more than 1,300 points, or 10.5 percent. By one broad measure kept by Dow Jones, almost $1.9 trillion in market value has disappeared.

For the day, the Dow closed down 512.76 points, at 11,383.68. It was the steepest point decline since Dec. 1, 2008.

Thursday’s decline was the ninth-worst by points for the Dow. In percentage terms, the decline of 4.3 percent does not rank among the worst. On Black Monday in 1987, for example, the Dow fell 22 percent.

Two weeks ago, investors appeared worried about the deadlocked negotiations in Washington over raising the ceiling on government debt. As soon as the ceiling was raised, investors focused on the economy, and the selling accelerated.

On Thursday, growing fear about the weakening U.S. economy was joined by concern in Europe that the troubled economies of Italy and Spain might need help from the European Union.

The European Union has already given financial assistance to Greece and Ireland, two countries that have struggled to pay their debts. A financial rescue package for Italy or Spain might be more than the group of countries can handle.

Traders also unloaded stocks before Friday’s release of the government’s unemployment report for July, which is expected to show weak job growth and perhaps a rise in the unemployment rate, which is 9.2 percent.

Together, they produced “a perfect storm of selling,” said Ryan Larson, head of U.S. equity trading for RBC Global Asset Management.

Until a week ago, Wall Street had mostly convinced itself that the U.S. economy would improve in the second half of the year. Gas prices were falling, and Japanese factories were resuming production after disruptions from the March earthquake.