Goldcorp

I can think of no more essential question to pose to investors during these tumultuous times. I could, of course, state it more eloquently: "Pardon me, would you happen to have any Goldcorp (NYSE: GG)?"

A flurry of downgrades and target-price reductions rained down upon Goldcorp after the company released lowered guidance late last week, projecting a pit stop for production growth during 2009. Until those analysts begin including their gold price forecasts alongside their outlook for miners, however, I find it best to tune them out entirely. It is indeed unfortunate that declining production from mines like Goldcorp's El Sauzal will offset many of the gains from the newer ones this year, but I continue to urge Fools to focus upon the larger picture.

The newly issued forecast for 50% production growth through 2013 is only about 5% below what analysts had targeted, and the starting point of 2.3 million ounces of gold produced in 2008 is nothing to sneeze at. Goldcorp continues to post impressive cost metrics, with anticipated 2008 costs of about $300 per ounce of gold and about $365 for 2009. I have heaped praise upon intermediate miners like Yamana Gold (NYSE: AUY) and my top pick Agnico-Eagle Mines (NYSE: AEM) on the basis of their low cost structure, but Goldcorp achieves similar margins on a much grander scale.

After divesting its sizeable stake in spin-off Silver Wheaton (NYSE: SLW) a year ago, Goldcorp's debt-free balance sheet is a thing of beauty. Nonetheless, the company is deferring some longer-range development projects to focus resources upon the three core properties under development: Penasquito, Red Lake, and Pueblo Viejo. Penasquito is truly a world-class deposit, and will be the primary driver of Goldcorp's production growth for years to come. At Red Lake, where Goldcorp founder Rob McEwen has struck another bonanza through junior explorer Rubicon Minerals (AMEX: RBY), Goldcorp will obtain more than one quarter of 2009 production despite deferring some improvement projects. Of the $1.4 billion Goldcorp plans to spend in 2009, $430 million will go to Pueblo Viejo, a joint venture with larger rival Barrick Gold (NYSE: ABX).

Bring on the downgrades, analysts! In the long run, I believe they can only help Fools by creating more attractive entry points. After shares promptly doubled from their October low, we frankly needed a little consolidation.

US Stocks Head for Lower Open

U.S. stocks headed for a lower open Wednesday after orders for big-ticket manufactured goods declined for a second straight month in February.

The Commerce Department report that durable goods orders fell 1.7 percent last month -- rather than rising as the market expected -- appeared to rekindle some unease about the health of the economy.

The report comes a day after stocks generally extended their gains after two sessions of sharp advances. The market's recent ability to add to its climb has been greeted by bullish investors as a sign that its troubles are on the mend; Wall Street hadn't succumbed to a recent pattern of selling off after such a strong move upward. The Dow Jones industrial average has risen more than 425 points in the past three sessions.

But the durable goods numbers made it unclear whether the rally would hold.

Government figures are also due after the opening bell on new home sales.

Dow Jones industrial average futures fell 38, or 0.30 percent, to 12,477. Standard & Poor's 500 index futures fell 4.30, or 0.32 percent, to 1,347.10, while Nasdaq 100 index futures fell 4.80, or 0.26 percent, to 1,821.20.

Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.50 percent from 3.51 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude rose $1.01 to $102.23 in premarket electronic trading on the New York Mercantile Exchange.

Corporate news appeared to weigh on some investors. Private equity firms leading a $19.5 billion buyout of Clear Channel Communications Inc. were having difficulty reaching terms with the banks committed to financing the deal and the plan was close to collapse, according to a report by The Wall Street Journal.

In other corporate news, Motorola Inc. said it plans to split its troubled handset business from other operations, creating two separate, publicly traded companies.

Electronic parts manufacturer Jabil Circuit Inc. posted a fiscal second-quarter loss and warned its third-quarter results will fall short of Wall Street's expectations.

Overseas, Japan's Nikkei stock average fell 0.30 percent. In morning trading, Britain's FTSE 100 fell 0.48 percent, Germany's DAX index fell 0.41 percent, and France's CAC-40 was off 0.62 percent.

Stocks Fall, Giving Up Early Gains

Wall Street ended a tumultuous week with a sharp decline Friday, backtracking following two days of stunning gains as investors turned cautious and cashed in some of their winnings. The Dow Jones industrial average still managed to record its first weekly advance of 2008, even as it fell more than 170 points on the day.

The week, which started with a 465-point drop in the Dow soon after the market opened Tuesday, showed that the stock market is still fractious but may be going through healthy process of trying to establish a bottom following weeks of sharp declines.

Investors had an initial burst of enthusiasm Friday, sending each of the major indexes up more than 1 percent, after upbeat profit reports from big names like Microsoft Corp. and word of a possible buyout of a trouble bond insurer. But the advance proved short-lived and the eventual decline wasn't surprising given that investors putting down bets ahead of the weekend were coming off two days of big gains -- including 400 points in the Dow.

"People may be looking to take some profits off the table in this volatile market. And there's a lot of activity that's coming up next week," Scott Fullman, director of investment strategy for I. A. Englander & Co., said during the day's back-and-forth trading.

President Bush is scheduled to deliver his State of the Union address Monday. Meanwhile, the Federal Reserve is expected to hold its first regularly scheduled meeting of the year on Tuesday and Wednesday, and then the Labor Department will weigh in on the state of the job market on Friday.

Despite the pullback, Wall Street's tone Friday stood in sharp contrast to the intensely dour mood that hung over the market when the week began. While U.S. markets were closed Monday for Martin Luther King Jr. Day, stocks in Asia and Europe plunged amid fears of a precipitous slowdown in the U.S. economy. To stave off a similar sell-off in the U.S. over recession fears, the Fed stepped in before the opening bell Tuesday with an emergency interest rate cut.

The central bank's move to lower rates by a big 0.75 percentage point to 3.5 percent helped shore up investors' confidence and led stocks to end the day well off their lows, although they still closed down. A day later, on Tuesday, Wall Street had an astonishing about-face, with the Dow swinging more than 630 points and turning a sharp sell-off into huge gains. Stocks then extended their advance Thursday.

The Fed is widely expected to cut rates again at next week's meeting; many analysts expect a half-point cut.

With Friday's decline, the market might well be following the pattern of past corrections, when huge gains were often followed by some retrenchment. Many market watchers consider such backing and filling a sign of health. However, with much economic uncertainty ahead, investors may need months before they can decide whether to take the market solidly higher.
The Dow fell 171.44, or 1.38 percent, to 12,207.17. The Dow had been up more than 100 points in the early going.

Broader stock indicators also fell. The Standard & Poor's 500 index fell 21.46, or 1.59 percent, to 1,330.61. The technology-heavy Nasdaq composite index fell 34.72, or 1.47 percent, to 2,326.20.
Despite the huge moves seen during the week, stocks finished not far beyond where they began, with the Dow adding 108 points, or 0.89 percent. The S&P 500 ended the week up 0.41 percent and the Nasdaq lost 0.59 percent.
Declining issues outpaced advancers by about 3 to 2 Friday on the New York Stock Exchange. Consolidated volume came to 4.78 billion shares, down from 5.48 billion shares traded Thursday.
Government bond prices jumped as stocks declined. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.56 percent from 3.71 percent late Thursday.

The dollar was mixed against other major currencies, while gold prices rose. Light, sweet crude oil advanced $1.30 to settle at $90.71 a barrel on the New York Mercantile Exchange.
Investors are looking for clues about whether the market is due to add to its gains after a brief hiatus or whether another pullback is in the offing. Despite the increases logged this week, stocks are still down sharply in the new year.

"The market is extremely sensitive to any news that's out there. A year ago, it brushed off a lot of stuff. Now, it's just the opposite, and we're seeing reactions nearly immediately when things come out," Fullman said.

Despite giving up the early gains, Wall Street still appeared pleased by reports from U.K. newspapers that billionaire Wilbur Ross was in talks to acquire bond insurer Ambac Financial Group Inc. Financial woes at many U.S. bond insurers have caused headaches in recent weeks for investors worldwide who have worried that tightness in the credit markets could worsen should one of the companies buckle under an inability to draw new business.
Ambac rose 21 cents to $11.54.

Word of Ross' interest follows comments this week by New York State regulators that indicated they would consider lending support to shore up the struggling bond insurance industry. While uncertainty remains over what role regulators might play, the comments initially helped reassure Wall Street and made room for stocks to rally.

Other corporate news appeared to offer investors mixed readings on the economy.
Microsoft finished down 31 cents at $32.94 after spending much of the session higher. The company raised its forecast for the rest of its fiscal year, which ends in June, and said its quarterly earnings jumped 79 percent. Microsoft cited the growing importance of its sales outside the U.S.

The Russell 2000 index of smaller companies fell 4.12, or 0.59 percent, to 688.60.
Overseas, Britain's FTSE 100 closed down 0.12 percent, Germany's DAX index finished off 0.06 percent, and France's CAC-40 fell 0.76 percent. Japan's Nikkei stock average jumped 4.10 percent after falling sharply earlier in the week. Hong Kong's Hang Seng index likewise surged 6.73 percent by the close.

The Dow Jones industrial average ended the week up 107.87, or 0.89 percent, at 12,207.17. The Standard & Poor's 500 index finished up 5.42, or 0.41 percent, at 1,330.61. The Nasdaq composite index ended down 13.82, or 0.59 percent, at 2,326.20.

The Russell 2000 index finished the week up 15.42, or 2.29 percent, at 688.60.

The Dow Jones Wilshire 5000 Composite Index -- a free-float weighted index that measures 5,000 U.S. based companies -- ended Friday at 13,423.62, up 115.17 points, or 0.87 percent, for the week. A year ago, the index was at 14,358.67.