Russell 2000 in free fall
The Russell 2000 (NYSE: IWM) is posting steep losses as investors react to news of poor earnings and more credit fears. At 1:37 p.m. ET, the small-cap index was down 13.78 points, or 1.67%, to 811.25. The Dow Jones Industrial Average (INDU) had retreated 2098.26 points, or 1.5%, to 13,680.70.
The bears have been running the show ever since Wachovia Corp. (Nasdaq: WB) reported before the opening that its third-quarter profit fell 10% due to difficult credit market conditions.
Charlotte, N.C.-based Wachovia, the fourth largest U.S. bank, also said that it recorded a provision for credit losses of $408 million, about four times the level during the same three months of 2006.
Contributing to more poor earnings news was heavy equipment maker Caterpillar Inc. (NYSE: CAT), which announced that quarterly profit missed analysts’ forecasts. The company forecasts that the ongoing slump in the U.S. housing sector will result in a 12% drop in sales of machinery and engines in 2007. Peoria, Ill.-based Caterpillar expects international sales to pick up the slack.
In commodities news, the price of oil has eased $1.43 to $88.04 a barrel. The recent spike in oil prices was partially attributed to tensions along the border between Iraq and Turkey and the weakness of the U.S. dollar.
Like most other commodities, oil is denominated in dollars.
Thus far today, the U.S. dollar has appreciated slightly. The greenback can now be exchanged for about 0.701 euros, whereas it began the day at just below 0.6995 of the currency used by 13 countries in the 27-member European Union.
Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• CyberSource Corp. (CYBS), up 22% on news of a higher third-quarter profit.
• Authorize.Net Holdings Inc. (ANET), up 16%.
• LaserCard Corp. (LCRD), up 14% on news of a narrower second-quarter loss.
Biggest percentage losers:
• Angiotech Pharmaceuticals Inc. (ANPI), down 3% on news of a lowered 2007 outlook.
• Triad Guaranty Inc. (TGIC), down 18%.
• Nanophase Technologies Corp. (NANX), down 16% on news of a wider-than-expected third-quarter loss.
About the Author
Reporter Alex Alexandrov is based in SmallCapInvestor.com's Washington, D.C. bureau.
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