Small caps rebound

Alex Alexandrov | Jan 18, 2008 10:36am EST | Comment

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The Russell 2000 (NYSE: IWM) and the other major U.S. indices are posting gains on upbeat news from major corporate players.

At 10:34 a.m. ET, the small-cap index had added 4.89 points, or 0.72%, to 685.46. The Dow Jones Industrial Average (INDU) was up 121.98 points, or 1.07%, to 12,289.19.

Small-cap stocks opened in the green on news that General Electric Co. (NYSE: GE) reported a fourth-quarter profit from continuing operations of $6.82 billion, or $0.68 per share, compared with $5.95 billion, or $0.58 per share, a year earlier. The result matches analysts’ expectations.

The earnings increase was largely due to strong demand for the Fairfield, Conn.-based company’s heavy equipment products.

Also contributing good news is International Business Machines Corp. (NYSE: IBM), which reported fourth-quarter earnings and issued a 2008 guidance above Wall Street’s projections.

In economic news, the Reuters/University of Michigan consumer sentiment index rose to a level of 80.5 in January from December’s 75.5. That came as a surprise to economists, who were expecting the measure to post a small decline. The index tracks consumers’ willingness to spend money.

Investors will be waiting to see what kind of stimulus package President Bush proposes in order to keep the U.S. economy out of recession. Bush is expected to unveil his plan at approximately 12 p.m. ET, and although details have not been revealed, some observers expect the offer to include rebates for taxpayers.

U.S. Federal Reserve chairman Ben Bernanke said on Thursday that he supports a stimulus package as long as at it can be enacted soon and provide quick relief.

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

Biggest percentage gainers:

• PC Mall, Inc. (MALL), up 12%.
• Semitool Inc. (SMTL), up 8%.
• Excel Maritime Carriers Ltd. (EXM), up 10%.

Biggest percentage losers:

• AZZ inc. (AZZ), down 10% on news the company projects fiscal 2009 earnings below analysts’ projections.
• STRATTEC Security Corp. (STRT) down 10% on news that net income for the fiscal second quarter missed analysts’ expectations.
• Stanley Inc. (SXE), down 9%.