Economy

Why did Vale stock bounce back after a 24-percent crash?

When the Brumadinho dam collapsed on January 25, shareholders of mining giant Vale caught a break: it was a public holiday in the city of São Paulo, meaning the domestic stock exchange was closed. Company shares crashed 8 percent on the New York Stock Exchange, but delayed losses until after the weekend. On Monday, the effects of the disaster came like a wrecking ball: Vale stock crashed 24 percent and the company lost BRL 70 billion in market value, an all-time record for companies traded in Brazil.

Ratings agency Fitch downgraded Vale’s investment grade after the tragedy—due to the expected cost of reparations Vale will have to pay to the families of...

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