After a tough start to trading this morning, the S&P/ASX 200 (INDEXASX: XJO) has recovered and pushed nearly 1% higher before close.
Leading the index up are mining giants BHP Billiton Limited (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG). The S&P/ASX 200 RESOURCES (INDEXASX:XJR) index jumped 2.13% higher.
By percentage gains, mid-tier iron ore miners Mt Gibson Iron Limited (ASX: MGX) and Atlas Iron Limited (ASX: AGO) have risen 13.93% and 13.51%, respectively. In response to a 4.9% jump in the spot price of the steelmaking ingredient overnight.
However, with their shares down 49% and 63%, so far this year respectively, today's gains are unlikely to bring too many smiles to long-term shareholders' faces.
Indeed the resources sector in general has proven to be a precarious place for investors this year. Today's share price gains of 12.5% and 24.5%, respectively, for small-cap mining services companies Titan Energy Services Ltd (ASX: TTN) and WDS Limited (ASX: WDS) are likely to be little consolation for their shareholders. In the past month shares in both companies have nosedived. Falling 73% and 65%.
Foolish (capital 'F') investors will be wise to exercise caution when considering the prospects of small and mid-tier resources and mining services stocks because when it seems too good to be true, it usually is.
