What happened
Shares of Hecla Mining(NYSE: HL) shot higher on Wednesday and were up a solid 8.25% at the close. It's a U-turn for the silver stock, which was falling rapidly over the past couple of days after reporting a fire at a key mine. Investors might have seen value in the stock today as prices of precious metals rose on macroeconomic fears.
So what
In August, business activity in the U.S. grew at its slowest pace since February, as reflected in the S&P Global's U.S. Composite Purchasing Managers Index, which fell to 50.4 in August. The reading fell short of the market's expectations as it didn't expect to see the service sector contracting even as the manufacturing sector continues to be under pressure.
Adding to the disappointment on Wednesday, the Bureau of Labor Statistics narrowed its total tally of jobs created in March. In other words, the payroll growth in the year that ended in March was perhaps slower than expected.
The disappointing economic data raised questions about the strength of the U.S. economy and refueled investors' fears of a recession, compelling some to flock to safe-haven assets like gold and silver. Prices of both precious metals rose on Wednesday, with silver inching nearly 4% higher as industry experts also expect demand from China to recover as Beijing takes steps to slow down the yuan's depreciation.
Now what
With Hecla Mining stock dropping to its lowest point of the year on Tuesday and trading barely 20% off 52-week lows, investors saw hope in Wednesday's rebound in silver prices. They expect higher prices for the metal to offset at least some of the projected weakness in the miner's production this quarter because of a fire.
Earlier this week, Hecla Mining reported a fire at its Lucky Friday mine in Idaho and said it's expected to hurt the mine's production and costs. Hecla Mining is one of the largest silver producers in the U.S., and Lucky Friday is one of its two largest mines.
10 stocks we like better than Hecla Mining
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Hecla Mining wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of August 21, 2023
Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends S&P Global. The Motley Fool has a disclosure policy.
