Wednesday, June 2, 2010

Goldman Sachs (NYSE:GS) Upgrades Joy Global (Nasdaq:JOYG), Surges 8 Percent

The upgrade of Joy Global (Nasdaq:JOYG) by Goldman Sachs (NYSE:GS) pushed the mining-equipment manufacturer up over 8 percent on the day, up to $52.50, a gain of $4.24 or 8.77% as of 4:04PM EDT.

What was important about this wasn't the upgrade, which will always give a quick boost to a company, but the reason behind the upgrade, which in the case of Goldman Sachs for Joy Global, makes a lot of sense.

The reasoning relates to capex or capital expenditures the mining industry around the world has committed to spending on new equipment this year.

Goldman estimates it'll rise as high as 30 percent in 2010.

As with most others watching the markets and economics, concerns over China and the sovereign debt of the European Union could easily dampen those estimates, which a lot of analysts in other sectors have chosen to ignore or consider irrelevant.

But until the numbers come in, it isn't a surety as to how deeply these latest challenges will effect any industry, including those manufacturing mining equipment like Joy Global does.

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