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Once the financial world began to hold its collective breath as third-quarter earnings results approached, some pleasant surprises were bound to let them take in a little oxygen. And when finger-crossing investors scour the market for faint signs life within a struggling U.S. economy, it's wholly appropriate that a touch of welcome strength has come forth from gritty steelmaker Nucor (NYSE: NUE ) .
Nucor has already made it abundantly clear that it simply will not buckle under the pressure of a domestic economy that continues to cling to what CEO Dan DiMicco prophetically termed the "granddaddy of all jobless recoveries." The steelmaker's resilience is again in evidence with third-quarter earnings of $0.57 per share, beating consensus estimates by $0.03.
Operating at 74% of capacity during the period, Nucor leads a curious Fool to question whether the devastating sell-off that has plagued metallurgical coal and iron ore producers over recent months may represent a disconnect from apparently resilient levels of domestic steel demand. Although the weakness in Peabody Energy (NYSE: BTU ) , Rio Tinto (NYSE: RIO ) and other export-heavy suppliers may primarily relate to fluctuating indications of demand from China, the fate of a miner like Cliffs Natural Resources (NYSE: CLF ) is best considered in the context of domestic steelmaking activity. Thus far, at least, it appears the complex of stocks relating to the domestic steel market has braced for something that is not yet apparent in Nucor's latest results. Third-quarter steel shipments from Nucor grew 5% sequentially, and stood 9% above the prior-year mark. Although realized prices -- both for steel products and the raw materials required to make them -- are ultimately a function of global market dynamics, investors may find a touch of timely reassurance in the observation that domestic steelmaking activity has not fallen off a cliff, as some recent economic data may have led them to fear.
If tempered expectations of stagnant-to-imperceptible growth are the new normal, then Nucor's market outlook epitomizes the trend. The company notes: "End markets such as automotive, heavy equipment, energy, and general manufacturing have continued to show the most strength compared to 2010 but have shown very little improvement compared to the first half of 2011." As conditions like this persist, I expect the obvious performance gap between Nucor and less desirable rival U.S. Steel (NYSE: X ) to widen further. And if that new normal has you turning to dividend stocks for reliable returns, Nucor certainly makes a powerful candidate, with an alluring 4.2% yield.