Small caps continue in the red

Alex Alexandrov | Nov 15, 2007 2:11pm EST | Comment

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The Russell 2000 (NYSE: IWM) and the other major U.S. indices are in negative territory with two hours left in the session. At 2:04 p.m. ET, the small-cap index was off 10.69 points, or 1.37%, to 771.78. The Dow Jones Industrial Average (INDU) had retreated 58.45 points, or 0.44%, to 13,172.56.

The bears are on top thus far today as investors digest economic reports.

Consumer prices added 0.3% in October, the U.S. Labor Department announced before the opening. That follows a similar rise in September. Core prices, which exclude the volatile costs of food and energy, added 0.2%, also the same as a month earlier.

While economists were expecting those results, they were surprised by the sharp increase in weekly jobless claims.

Claims for the week ended Nov. 10 jumped 20,000 to 339,000, outpacing projections of a more modest increase of 3,000 from an upwardly revised level of 319,000 the previous week. Michigan was the state with the largest increase in jobless claims, shedding over 4,000 jobs in its automotive industry.

“It's too early to read too much into this week's rise in jobless claims,” said Arun Raha, vice president of Economic Research and Consulting for the North American operations of reinsurance company Swiss Re, in an email. “The four week moving average was unchanged, suggesting that the underlying trend has not changed.”

The four week moving average, considered a more stable measure, stayed put at 330,000 after the previous week’s average was revised.

However, Raha cautioned that he expects the labor market to soften as the U.S. economy slows down.

The economy is shifting into lower gear in part due to the ongoing slump in the U.S. housing market.

Speaking of the housing situation, Wells Fargo & Co. (NYSE: WFC)’s CEO told a banking conference in New York that the pain is far from over. John Stumpf said he believes the downturn is the worst since the Great Depression but added that his company will get through the rough patch in good shape.

Elsewhere, the price of oil has decreased $1.16 to $92.93 per barrel.

Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• Kulicke and Soffa Industries, Inc. (KLIC), up 10% on news of a rise in fiscal fourth-quarter earnings.
• Canadian Solar Inc. (CSIQ) up 8% on news on Wednesday of a fourth-quarter outlook exceeding Wall Street’s projections.
• MedCath Corp. (MDTH) up 8% despite news of a drop in fiscal fourth-quarter earnings.

Biggest percentage losers:

• China Shenghuo Pharmaceutical Holdings, Inc. (KUN), down 27% on news of a decline in third-quarter net sales.
• Lifeway Foods Inc. (LWAY), down 24% on news of a decline in third-quarter profit.
• GlobalSCAPE Inc. (GSB), down 16% despite news of a rise in third-quarter profit.