Economic worries down small caps
The Russell 2000 (NYSE: IWM) is down on fears that the U.S. economy is slowing down despite news of a jump in third-quarter GDP. At 2:13 p.m. ET, the small-cap index had lost 5.38 points, or 0.70%, to 764.66. The Dow Jones Industrial Average (INDU) had added 6.34 points, or 0.05%, to 13,295.79.
The U.S. economy grew at an impressive 4.9% annual rate during the third quarter of 2007, the Commerce Department reported before the opening. That’s an upward revision from the preliminary figure of 3.9% and above economists’ projections of 4.8%.
Although that’s the highest quarterly growth rate in four years, investors are worried that slower growth lies ahead.
That’s in part because jobless claims for the week ended Nov. 24 rose 23,000 to 352,000, the highest number since February, according to the U.S. Labor Department before the start of trading. The revised figure for a week earlier is 329,000.
Also feeding the bears’ appetite is news that sales of new one-family houses in October came in below economists’ forecasts.
The U.S. Census Bureau reported that new home sales increased 1.7% to 728,000, but the total from September was revised down sharply to 716,000 from 770,000 previously. Economists were calling for sales of 750,000.
The numbers tell us that the slump in the housing sector is continuing and showing no signs of letting up.
Regionally, the Northeast saw a year-over-year increase in sales of new homes, while the Midwest, West, and South suffered declines.
Elsewhere, the price of oil is up $0.31 to $90.93 a barrel following news of a fire at a pipeline carrying crude oil from Canada to the U.S. Midwest. Earlier today the price had climbed above $92 a 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:
• TiVo Inc. (TIVO), up 24% on news of a narrower third-quarter loss.
• Solarfun Power Holdings Co. Ltd. (SOLF), up 28% on news of a rise in third-quarter profit.
• SXC Health Solutions Corp. (SXCI), up 18%.
Biggest percentage losers:
• The Cato Corp. (CTR) down 23% on news of a decline in third-quarter profit.
• American Woodmark Corp. (AMWD), down 19% on news it cut its full-year profit and sales targets.
• California First National Bancorp (CFNB), down 18%.
The U.S. economy grew at an impressive 4.9% annual rate during the third quarter of 2007, the Commerce Department reported before the opening. That’s an upward revision from the preliminary figure of 3.9% and above economists’ projections of 4.8%.
Although that’s the highest quarterly growth rate in four years, investors are worried that slower growth lies ahead.
That’s in part because jobless claims for the week ended Nov. 24 rose 23,000 to 352,000, the highest number since February, according to the U.S. Labor Department before the start of trading. The revised figure for a week earlier is 329,000.
Also feeding the bears’ appetite is news that sales of new one-family houses in October came in below economists’ forecasts.
The U.S. Census Bureau reported that new home sales increased 1.7% to 728,000, but the total from September was revised down sharply to 716,000 from 770,000 previously. Economists were calling for sales of 750,000.
The numbers tell us that the slump in the housing sector is continuing and showing no signs of letting up.
Regionally, the Northeast saw a year-over-year increase in sales of new homes, while the Midwest, West, and South suffered declines.
Elsewhere, the price of oil is up $0.31 to $90.93 a barrel following news of a fire at a pipeline carrying crude oil from Canada to the U.S. Midwest. Earlier today the price had climbed above $92 a 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:
• TiVo Inc. (TIVO), up 24% on news of a narrower third-quarter loss.
• Solarfun Power Holdings Co. Ltd. (SOLF), up 28% on news of a rise in third-quarter profit.
• SXC Health Solutions Corp. (SXCI), up 18%.
Biggest percentage losers:
• The Cato Corp. (CTR) down 23% on news of a decline in third-quarter profit.
• American Woodmark Corp. (AMWD), down 19% on news it cut its full-year profit and sales targets.
• California First National Bancorp (CFNB), down 18%.
About the Author
Reporter Alex Alexandrov is based in SmallCapInvestor.com's Washington, D.C. bureau.
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