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Vale S.A. (NYSE:VALE): Joy Global (NASDAQ:JOY) along with other companies in the mining sector sink following Joy’s report of weaker than expected Q3 results and significantly lowered its full-year earnings per share guidance. The mining equipment maker, who blamed its struggles on macro economic trends, lowered its fiscal 2012 earnings per share guidance to $6.92-$7.07 from its previous outlook of $7.15-$7.45. Analysts’ consensus estimate was $7.07. Reduced demand for U.S. coal and the ongoing slowing of the Chinese economy has negatively affected Joy’s results, the company’s CEO, Mike Sutherlin stated. “Although there is evidence that both the U.S. and China markets have bottomed, we expect a recovery to be sluggish,” Sutherlin added. In a note to investors earlier in the day, BMO Capital analyst Joel Tiss stated that he believes that earnings per share estimates for Joy will probably not bottom for a few quarters, if not longer. Tiss keeps a $49 price target and Underperform rating on the shares. In mid-morning trading, Joy fell $2.91, or 5.48 percent, to $50.16. Other stocks in the mining sector also declined, with Caterpillar (NYSE:CAT) decreasing 1.50 percent to $84.72, Vale (NYSE:VALE) returning 1.90 percent to $16.25, Rio Tinto (NYSE:RIO) falling 2.39 percent to $44.05, and Cliffs Natural (NYSE:CLF) dropping 2.08 percent to $36.36. The shares closed at $16.10, down $0.46 or 2.78% on the day. They have traded in a 52-week range of $16.50 to $28.41.
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Whiting USA Trust I (NYSE:WHX): BP Prudhoe Bay Royalty Trust (NYSE:BPT) retreats for a third straight day after a Wall Street Journal report on Friday night stating that the royalty trust’s market cap seems to be larger than the amount of cash it has available for distributions. In its latest annual report, BP Prudhoe stated that it had $1.4 billion available for distribution, according to The Journal’s Jason Zweig. Even after the stock had fallen for two days, the trust’s market cap continued to be nearly $1.87 billion prior to the market opened today. Because royalty trusts can not acquire new assets, their yield tends to fall as the wells and mines in which they own stakes become depleted, which causes the trusts to eventually disappear, The Journal stated on August 24. In late morning trading, BP Prudhoe fell $7.26, or 7.77 percent, to $86.20. The stock fell more than 27 percent so far this week. Whiting USA Trust I, which was also mentioned by Zweig, has also been in a downward trend. The shares closed at $8.47, up $0.09 or 1.07% on the day. They have traded in a 52-week range of $8.25 to $19.15.
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