Tag - NASDAQGM:CLUB

Stocks are soaring this afternoon after the Federal Reserve announced it is seeing a “somewhat slower” slide in the economy and left interest rates at a record low level.

At 2:37 pm ET, the Russell 2000 (NYSE:IWM) is up 4.53% at 494.26, while the Dow is up nearly 3% and the S&P 500 is up 3.05%.

On the data front this morning, the Commerce Department reported that the U.S. economy contracted at a steeper-than-expected pace in the first quarter, weighed down by sharp declines in exports and business inventories. The news did little to quell positive investor sentiment after the Fed left interest rates untouched.

Small caps flying high today include Town Sports International Holdings (Nasdaq:CLUB), up 35.5% on heavier-than-average volume, while Encore Capital Group (Nasdaq:ECPG) is up 36% after reporting a rise in Q1 profits.

*****We’ve reached the stage of this rally where bad is good. It started innocently enough in early March when Citigroup (NYSE:C) shocked the world by saying it was making money. A few earnings surprises have helped it along. But now, good news is running out, and to fill the void, investors are saying that bad news is actually good.

I don’t know how many of you have learned your lesson by uttering the phrase “It can’t get any worse.” I have. It seems that those five words have the power to conjure ancient gods that are full of wrath. Such is their displeasure with man that they will, rest assured, make certain that things do, indeed, get worse.

I now fear these gods are being awakened. Because there’s no way to explain the rally for stocks in the face of poor forward earnings guidance, continued weakness in home prices, and worse than expected GDP unless investors are saying that “It can’t get any worse.”

Repent, I beg you. Cast off your hubris before we get some serious gnashing of teeth.

*****Case in point: oil prices. Crude prices continue to remain strong despite falling demand and growing inventories. Of course, we all know that prices will rise eventually (and SmallCapInvestor PRO members have made good money on this expectation by buying small oil exploration companies). But timing is an issue.

Right now, oil is sitting in tankers because traders are convinced that the . . .

Small-cap stocks edged lower Friday, unable to ride out a morning wave of bullish enthusiasm after the monthly employment report showed the U.S. labor market was struggling, but not nearly as bad as feared. In the initial glow of the jobs release, the Russell 2000 (NYSE:IWM) surged to the highest level since early January, but was unable to thunder home on the stretch Friday afternoon, dipping 4.01, or 0.55%, to 725.74.

Although the sloppy close in equities may have taken some of the excitement out of this week’s advance, it should still be noted that the Russell finished out Friday at the highest weekly level since early February. There are very few shorts holding index profits in this market, and if the Russell can sustain upward momentum, those shorts will be forced to buy their way out of losing trades in the weeks ahead.

Back to the actual employment report this morning, the headline figures — the unemployment rate and the payroll number — were both much better than forecast, with the unemployment rate coming in at 5%, compared with the average guess of 5.2%, while the payroll loss for April was reported at 20,000 jobs, compared with the median estimate of an 80,000-job decline.

“The unemployment rate dropped in April because of a temporary surge in household jobs,” Steven Wood, chief economist with Insight Economics, said in an email. “However, the unemployment rate will climb further over the next several quarters as the economy continues to slowly deteriorate.”

Wood clearly believes that the U.S. economy is not exactly free and clear of further downside risk and with consumers struggling against sinking home values, rising energy and food costs, caution seems quite reasonable looking forward. Looking ahead . . .

Small-cap stocks roared out of the gate in morning trading, but a widespread sell-off began around 10 a.m. ET and erased gains. A rallying attempt shortly before noon was met with resistance and small caps have continued to decline in Friday afternoon trading. At 1:34 p.m. ET, the Russell 2000 (NYSE:IWM) slipped 4.01, or 0.55%, at 725.74.

At 10:08 a.m. ET, the small-cap index peaked at 735.78, its highest point since early January. Bullish investors were encouraged by a better-than-expected monthly employment report, which showed a decline of 20,000 payroll jobs in April — much better than the median forecast for a loss of 80,000 jobs. In addition, the headline unemployment figure came in at 5%, which was down from 5.1% last month and well above the number cruncher’s pre-release figure of 5.2%.

Just ahead of the employment release, the Federal Reserve added liquidity into the system, which sparked a brief flurry of conspiracy theorists that perhaps the credit crunch was rearing its head again, or that the employment report would be a bearish surprise. Clearly, the latter wasn’t the case, and it’s most likely that the . . .

Small-cap stocks shot out of the gate this morning amid a wave of buying enthusiasm, with the Russell 2000 (NYSE:IWM) up 2.74, or 0.37%, at 732.48 at 9:57 a.m. ET. The early peak was at 734.84, which marks the highest point since early January. Bullish investor psychology was powered by a better-than-expected monthly employment report, which showed a decline of 20,000 payroll jobs in April — much better than the median forecast for a loss of 80,000 jobs. In addition, the headline unemployment figure came in at 5%, which was down from 5.1% last month and well above the number cruncher’s pre-release figure of 5.2%.

It should be noted that the labor market is still contracting, which is a troubling sign for the economy. Still, markets tend to trade on expectations, and when the news isn’t as bad as feared, it clears the way for buying interest to emerge. However, before March lows were carved out, the market had an unsettling way of trading higher on jobs day in recent months, only to resume the downward swing in the days following the initial reaction.

Just ahead of the employment release, the Federal Reserve added liquidity into the system, which sparked a brief flurry of conspiracy theorists that perhaps the credit crunch was rearing its head again, or that the employment report would be a bearish surprise. Clearly, the latter wasn’t the case, and it’s most likely that . . .

FirstCity Financial Corp. (Nasdaq:FCFC), ArcSight Inc. (Nasdaq:ARST) and Interwoven, Inc. (Nasdaq:IWOV) were among the new 52-week lows established during Monday's trading among companies with market capitalizations or values under $750 million. 

Duckwall-ALCO Stores, Inc. (Nasdaq:DUCK), Meta Financial Group Inc. (Nasdaq:CASH) and Town Sports International Holdings, Inc. (Nasdaq:CLUB) were also among the 52-week small-cap lows.

Here are today's 52-week small-cap lows:

The Russell 2000 (NYSE: IWM) futures are lower and the small-cap index will open with a decline.

Small-cap stocks are set for a bearish opening following news that insurance giant American International Group, Inc. (NYSE: AIG) suffered the biggest quarterly loss in its history. The New York-based company had to write down over $11 billion in losses related to subprime mortgages, contributing to a net loss of $5.29 billion, or $2.08 per share.

Elsewhere, the U.S. Commerce Department reported this morning that spending increased 0.4% in January, while personal income added 0.3%. Economists were expecting smaller increases.

The same report showed that a measure of inflation is just above the U.S. Federal Reserve’s preferred year-over-year range.

In what has become a familiar refrain, small cap stocks retreated in the shadow of a double top formation on daily charts Thursday – the third time this has happened during the month of February, which is quite unusual. The Russell 2000 closed down 10.72, or 1.50% at 705.72.

The market faces some mild economic data risk this morning. The Chicago Purchasing Manager’s information is out at 9:45 a.m. ET and Michigan sentiment figures at 10:00 a.m. ET. The market needs to stabilize above 700 ahead of the weekend, with initial support just below at 702, then at 694 and 688. Meanwhile, resistance is at 712, but the big test is up at 723.50.

The Russell 2000 (NYSE: IWM) and the other major U.S. indices are languishing deep in negative territory. At 1:55 p.m. ET, the small-cap index had dropped 15.93 points, or 2.24%, to 696.55. The Dow Jones Industrial Average (INDU) was down 229.81 points, or 1.80%, to 12,548.34.

The mood on Wall Street remains bearish following disappointing news from the financial sector and the U.S. economy.

The negative tone was set before the start of trading when Citigroup Inc. (NYSE: C) announced that it swung to a fourth-quarter loss of $9.83 billion, or $1.99 per share, compared with a profit of $5.13 billion, or $1.03 per share, a year earlier.

That’s the biggest loss in the nearly 200-year history of the New York-based bank. Citigroup also reported that it is cutting over 4,000 jobs and has incurred $18.1 billion in pretax write-downs and credit costs.

In the face of such abysmal numbers, Citigroup turned for help to the governments of Singapore and Kuwait, as well as one of its former chairman and a member of the royal family of Saudi Arabia. The investors are chipping in with a cash infusion of $14.5 billion.

Today’s leading economic news is also bearish and fueling more worries of a looming recession.

The U.S. Census Bureau reported before opening that retail sales in December fell 0.4%, while economists were expecting to see a modest increase of 0.1%. Sales for November were revised down to a gain of 1% from an initially reported 1.2%.

The Russell 2000 (NYSE: IWM) is falling fast on news of an unexpected decline in U.S. retail sales and a scare from the financial sector.
 
At 10:54 a.m. ET, the small-cap index had lost 16.94 points, or 2.38%, to 695.54. The Dow Jones Industrial Average (INDU) was down 201.93 points, or 1.58%, to 12,576.22.

The bears are running the show on Wall Street following news that December U.S. retail sales declined more than expected.

The U.S. Census Bureau reported before the start of trading that retail sales in December fell 0.4%, while economists were expecting to see a modest increase of 0.1%. Sales for November were revised down to a gain of 1% from an initially reported 1.2%.

Purchases excluding automobiles also posted a decline of 0.4%, while economists were projecting a rise of 0.1%.

A pullback in consumer spending is a worrying sign for a U.S. economy that has already been hit by stagnating home prices, higher energy costs and a tightening of credit. Fears of a recession are once coming to the forefront.

There was more bearish news coming from the financial sector, with Citigroup Inc. (NYSE: C), the largest American bank by assets, reporting the biggest loss in its history.

Ceragon Networks Ltd. (Nasdaq: CRNT), Incyte Corp. (Nasdaq: INCY) and Online Resources Corp. (Nasdaq: ORCC) are among the most actively traded companies in Monday pre-market trading among those with market capitalizations under $750 million:

The Russell 2000 (NYSE: IWM) and the Dow Jones Industrial Average (INDU) are in negative territory despite news of a better-than-expected October jobs report.

At 10:28 a.m. ET, the small-cap index had lost 3.69 points, or 0.46%, to 791.49. The Dow was down 51.21 points, or 0.38%, to 13,516.66.

Non-farm payrolls increased 166,000 in October, compared with a downwardly adjusted increase of 96,000 in September, the U.S. Labor Department announced before the start of trading. That’s more than double the projected rise of 80,000 and a sign that the labor market remains tight and that the U.S. economy will most likely avoid recession.

The unemployment rate is unchanged at 4.7%.

The surprisingly strong jobs report makes it less likely that the U.S. Federal Reserve will move to lower the target interest rate during the remainder of 2007.

The jobs report also showed that average hourly earnings increased $0.03, or 0.2%, to $17.58 during October. That’s a rise of 3.8% from one year ago, suggesting that the tight labor market is not fueling inflation by putting too much upward pressure on wages.

The small-cap futures were logically higher and stocks opened in positive territory.

But the bullish sentiment did not last long, with the financial sector as the catalyst for the negative change.

In a country where obesity rates are on the rise, fitness-related companies such as Town Sports International Holdings, Inc. (Nasdaq: CLUB) and Gaiam, Inc. (Nasdaq: GAIA) stand to benefit.

According to a report in August from the Trust for American Health, a non-profit wellness organization, obesity rates rose in 31 U.S. states last year, and two-thirds of American adults and 25 million children are obese or overweight.

This news loosely echoes a 1991 Surgeon General’s Report and a 2001 Call to Prevent Obesity, both of which resulted in millions of Americans increasing their workout habits. Between 1996 and 2005, total U.S. health club revenues increased 7.5% annually, to $15.9 billion in 2005 from $8.3 billion in 1996, while the total number of club memberships grew 5.2% annually, to 41.3 million from 26.2 million. Some 85% of Americans surveyed believe obesity has reached epidemic proportions.

Town Sports International Holdings, which closed at $15.24 on Tuesday, is a leading operator of fitness clubs and the nation’s fourth-largest fitness club operator overall. At year-end 2006, it operated 147 clubs serving 453,000 members across four metro markets: New York, Boston, Philadelphia and Washington, DC.

The company achieves operating efficiencies by clustering its clubs, initially opening locations in city centers and then branching out to neighborhoods and suburbs. Town Sports is the largest fitness club operator in Manhattan with 38 locations, twice as many as the next largest competitor, and a total of 99 clubs within a 75-mile radius of New York City.

Neurochem Inc. (Nasdaq: NRMX), PHAZAR CORP. (Nasdaq: ANTP) and Sonic Solutions (Nasdaq: SNIC) are among the most actively traded companies in Monday pre-market trading among those with market capitalizations under $500 million:

Shares of Town Sports International Holdings, Inc. (Nasdaq: CLUB) got a jolt this morning after the company reported it swung to a profit late Thursday night.

For the three months ended June 30, the New York City-based company posted net income of $6.4 million, or $0.24 per share, compared with a loss of $2.7 million, or $0.13 per share, a year earlier. The company’s earnings outpaced analysts’ expectations of $0.21 per share.

Second-quarter revenue was $119.8 million, which met Wall Street expectations.

The company attributed revenue growth to boosted health club membership. For the second quarter, Town Sports’ membership revenue increased 8.8% to $96.9 million, from $89.1 million during the same period of 2006.

Town Sports projects full year net income in the range of $13.7 million to $14.7 million and earnings between $0.51 and $0.55 per share. Revenue for 2007 is expected to be in the range of $475 million to $480 million.

In pre-market trading, shares of the small-cap company soared $1.66, or 10.17%, at $17.99. Over the last 52 weeks, shares have fluctuated between $11.87 and $24.

All major U.S. indices are moving up following news of lower bond yields and flat existing home sales in May. At 11:46 a.m. ET the Russell 2000 had added 0.70 points, or 0.08%, to 835.45. The Dow Jones Industrial Average was up 91.93 points, or 0.69%, to 13,452.19.

Shares of Lipid Sciences Inc. (Nasdaq: LIPD) are in positive territory on news that the biotechnology firm is prepared to create a preventive vaccine against SARS (Severe Acute Respiratory Syndrome). A study funded by the National Institutes of Health validated the hypothesis that a modified SARS viral particle could result in an enhanced immune response, the Pleasanton, Calif.-based company reported before the start of trading. Shares have added $0.01, or 1%, to $1.51.

Brokerage firm Jefferies & Co. raised its rating on Smith Micro Software, Inc. (Nasdaq: SMSI), a maker of software for wireless devices, to “buy” from “hold.”

The Philadelphia Inquirer reported this morning that the sale of Trump Entertainment Resorts, Inc. (Nasdaq: TRMP) could be announced this week, according to people familiar with the deal.

Sangamo Biosciences, Inc. (Nasdaq: SGMO) revealed early phase data from its AIDS treatment ZFP Therapeutic program at the American Diabetes Association conference. The company reported “statistically significant” improvement in subjects with diabetes complications.

Business software maker NetScout Systems, Inc. (Nasdaq: NTCT) raised its first quarter revenue guidance to between $27 million and $28 million, up from its prior guidance of $26 million to $27 million.

Biopharmaceutical company Neurogen Corp. (Nasdaq: NRGN) reported positive top-line results for the mid-phase study of its insomnia treatment NG2-73.

The following are the most actively traded companies in Monday pre-market trading among those with market capitalizations under $500 million:

The small cap index is gaining ground this morning, as investors react to news of stronger-than-expected U.S. productivity growth.  In specific small cap action, shares of Hansen Medical, Inc. (Nasdaq: HNSN) got a lift on news U.S. regulators cleared the company’s medical mapping technology, while Town Sports International Holdings, Inc. (Nasdaq: CLUB) reported a quarterly net loss.

At 11:19 a.m. ET the Russell 2000 had added 1.40 points, or 0.17 percent, to 829.86.  The Dow Jones Industrial Average was up 15.76 points, or 0.12 percent, to 13,227.64.