Corus left shoulder or the foothills?

Steel shares rise on fundamentals, strong reports
Wed Dec 21, 2005 1:30 PM ET

NEW YORK (Reuters) - Shares across the steel sector were broadly higher on Wednesday after solid earnings reports from companies, including Chaparral Steel Co. (CHAP.O: Quote, Profile, Research) and continued strong fundamentals in the business.

Chaparral led the group higher, up 13.7 percent at $30.56 in afternoon Nasdaq trading. On Tuesday, the company said profits rose more than 50 percent on heavy demand.

Other gainers included Cleveland-Cliffs Inc. (CLF.N: Quote, Profile, Research), up 5 percent at $91.81; AK Steel Holding Corp. (AKS.N: Quote, Profile, Research), up 4.4 percent at $7.86; and Nucor Corp. (NUE.N: Quote, Profile, Research), up 3.2 percent at

$67.62.

The entire group got a boost recently after a bidding war broke out for Canada's Dofasco Inc. (DFS.TO: Quote, Profile, Research), although that was quickly followed by a sell-off.

But analysts said that, despite the weakness, the business still looked strong in general.

"The fundamentals in the sector still look pretty good," said independent analyst Michelle Applebaum. "People are overly -- and they have been all year -- overly concerned about a surge of cheap foreign steel from China."

Applebaum said it was also typical for the steel stocks to get something of a late-year bounce ahead of the busiest ordering season.