Small caps down on economic worries
The Russell 2000 (NYSE: IWM) and the other major U.S. indices are down as news of poor economic reports raise recession fears. At 2:45 p.m. ET, the small-cap index had lost 25.56 points, or 3.30%, to 720.45. The Dow Jones Industrial Average (INDU) was off 250.12 points, or 1.92%, to 12,806.60.
Stocks are falling across the board following news of a lackluster December jobs report that once again ignited fears of a recession.
The U.S. Labor Department announced before the start of trading that nonfarm payroll employment increased just 18,000 in December, well below economists’ projections of 70,000 new jobs following an upwardly revised level of 115,000 in November.
The unemployment rate jumped to 5%, the highest level in more than two years, from 4.7%, while the employment-population ratio slipped to 62.7% from 63.4% in November.
The numbers point to the weakest job creation since August 2003 as U.S. economic growth is faltering amid tighter credit and the ongoing slump in the housing market.
The disappointing jobs report makes it more likely that the U.S. Federal Reserve will vote to lower the federal funds rate during its two-day meeting starting Jan. 29. At its previous meeting on Dec. 11, the Fed lowered the rate to 4.25% from 4.50%.
The federal funds rate is the rate at which commercial banks make overnight loans to each other.
Elsewhere, the price of oil has slipped $1.28 to $97.90 following news of the poor jobs report. An economic slowdown, or possible recession, in the United States, the world’s top oil consumer, will lower demand for that commodity.
Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• North Pointe Holdings Corp. (NPTE), up 46% on news it is being acquired by QBE Insurance Group Ltd. (QBE) for $146 million.
• Origin Agritech Ltd. (SEED), up 21%.
• Spark Networks, Inc. (LOV), up 15% on news it is seeing a buyer.
Biggest percentage losers:
• Arctic Cat Inc. (ACAT) down 25% on news it has lowered its outlook for the fourth quarter and the fiscal year.
• Micrel, Inc. (MCRL), down 21% on news it has revised its earnings and revenue outlook for the fourth quarter of fiscal 2007.
• Amerigon Inc. (ARGN), down 19%.
About the Author
Reporter Alex Alexandrov is based in SmallCapInvestor.com's Washington, D.C. bureau.
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