Small caps see modest rise

Alex Alexandrov | Mar 05, 2008 4:44pm EST | Comment

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The Russell 2000 (NYSE: IWM) snapped a five-session losing streak on generally bullish economic news and plans to help a bond insurer. The small-cap index added 2.76 points, or 0.41%, to 683.74. The Dow Jones Industrial Average (INDU) gained 41.19 points, or 0.34%, to 12,254.99.

On a year-to-date basis, the Russell 2000 is down 10.74%, while the Dow is missing 7.61% and the S&P 500 has lost 9.17%.

A volatile day of trading began on a bullish note following news that business productivity growth for the fourth quarter of 2007 was revised up to an annualized rate of 1.9%, according to the U.S. Commerce Department before the opening.

Economists were expecting productivity to stay at its initially reported rate of 1.8%.

Contributing to the upbeat mood was a report after the start of trading from the Institute of Supply Management that non-manufacturing activity increased to a reading of 49.3% in February from 44.6% in January. That still indicates a contraction in the sector that provides about 80% of U.S. gross domestic product, but economists had projected worse.

Small-cap stocks were in the green until about 1:30 p.m. ET, when the suddenly dropped on news that bond insurer Ambac Financial Group, Inc. (NYSE: ABK) is planning on raising $1.5 billion in capital in order to keep its triple A rating. The index slumped to a session low of near 677 before rising again.

Among the biggest winners was intimate apparel maker Maidenform Brands, Inc. (NYSE: MFB), which reported after the close on Tuesday that fourth-quarter profit nearly doubled.

Here are the day’s biggest percentage gainers and losers, along with top volume leaders, among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• Canadian Solar Inc. (CSIQ), up 17% to $22.22 on news that fourth-quarter earnings beat analysts’ projections.
• Maidenform Brands, Inc. (MFB), up 16% to $14.01 on news of a rise in fourth-quarter profit.
• Optium Corp. (OPTM), up 16% to $7.00.

Biggest percentage losers:

• American Software, Inc. (AMSWA), down 31% to $6.03 on news of a decline in third-quarter profit.
• RehabCare Group, Inc. (RHB), down 16% to $16.50 despite news of a fourth-quarter consolidated net earnings.
• FX Real Estate and Entertainment Inc. (FXRE), down 12% to $5.13

Volume leaders:

• Canadian Solar Inc. (CSIQ) 7,918,600 shares traded.
• Tessera Technologies, Inc. (TSRA) 6,436,500 shares traded.
• R.H. Donnelley Corp. (RHD) 5,515,000 shares traded.

The day saw 55 small-cap stocks set 52-week lows, while 11small caps established a 52-week high.