Tag - NYSE:SAY

Stocks started positive in morning trading, but quickly gave ground before the noon lunch hour Eastern time and never recovered. The Dow Jones Industrials were down 1.25% to close at 8,504; the Nasdaq closed down 1.11% at 1,796; and the S&P 500 shed 1.27% to end the day at 912.

Small-cap stocks, as measured by the Russell 2000 Index, fared worse, giving up 1.22% to close at 505.

Today's small-cap gainers were lead by STEC Inc (Nasdaq:STEC), a California-based memory chip maker, up 29%. STEC increased its Q2 financial outlook stating that improved sales of its ZeusIOPS solid-state drive product line had caused the company to revision its guidance. STEC now expects adjusted earnings of between 32 and 36 cents per share.

Other small-caps showing leadership include La-Z-Boy, (NYSE:LZB) up 22% on news that it returned to profitability in Q4 and beating analysts' EPS estimates; Merge Healthcare (Nasdaq:MRGE) up 17%; Alvarion (Nasdaq:ALVR) up 16%; and Satyam Computer Services (NYSE:SAY) up 16%.

Small-cap decliners were lead by Matrixx Initiatives (Nasdaq:MTXX) down 70% on receiving a warning from the U.S. Food and Drug Administration (FDA) to discontinue selling it's Zicam product and for consumer to stop using it immediately. The FDA has indicated that there have been 130 reported cases of people losing the sense of smell after using the products. Zicam is a leading product for preventing and minimizing the effects of the common cold when the patient uses the product at the first symptoms of a cold. The FDA action affects only the nasal swabs and gels and does not apply to the tablets or lozenges.

Although Matrixx is on record stating that the product does not cause a loss of smell the company has indicated that it will consider withdrawing the products in questions, which in total account for roughly 40 percent of its sales.

Other small-cap decliners include Myriad Pharmaceuticals (Nasdaq:MYRXV) down 32%; Magyar Bancorp (Nasdaq:MGYR) down 34%; A-Power Energy Generation Systems (Nasdaq:APWR) down 24% on news that first quarter earnings fell by nearly half; and two of yesterday's leaders: Jazz Pharmaceuticals (Nasdaq:JAZZ) down 17% and QEP (Nasdaq:QEPC) down 15%. 

*****Jason Cimpl, technical analyst at TradeMaster Daily Stock Alerts, called yesterday's 2.5% drop on the S&P 500 to a tee. If you watched the video chart analysis from Jason that I included in Friday's Daily Profit, then you were ready for Monday's sell-off. I hope you were able to profit from it.

And bonus points to Jason for calling the closing level of the S&P within 2 points. I think Jason's video chart analysis will be a welcome addition to Daily Profit. Look for the next one in Friday's edition.

******If it weren't for gasoline, prices at the wholesale level would have fallen 0.1% in May. Still, prices are off 5% from this time last year. That's the biggest drop in 50 years. Is this good news?

Not for corporate profits, and so probably not for valuations. And not for the Fed, who's terrified of deflation. But for the crowd expecting runaway inflation because of a weaker dollar and rising interest rates, it might be.

It should be obvious that weak demand and high unemployment will keep a lid on prices in the short-term. Remember too that it took 18 months before rising oil prices really started to find their way into the prices of consumer goods, too. Right now, inflation expectations are just that - expectations.

Still, those expectations have helped oil and commodity prices run higher…

*****And inflation expectations aren't the only thing driving commodity prices higher. Demand from emerging markets, especially China and India, remains fairly strong. After all, these countries have money to spend to help re-inflate their economies.

Jason Cimpl will be discussing the outlook for inflation and commodity prices in a special video conference next Wednesday, June 24 at 6:00 P.M. It's totally free, and Jason will share his top gold stocks with attendees (yes, we see significant upside for certain gold stocks). This video conference is free of charge, you can sign up HERE.

*****The Ural mountain city of Yekaterinburg, Russia takes center stage in global economic news today. The BRIC countries--Brazil, Russia, India and China--are holding their first ever summit starting today. The U.S. is not invited.

That's because these emerging economic giants want more control over the global economy. And with a combined 42% of global currency reserves, they are in position to throw their weight around a little.

It's no secret that the U.S. depends on these countries to buy our Treasuries and fund our bailout and stimulus plans, not to mention our trade deficit. So the news that these countries will be discussing plans to diversify away from American bonds and buy IMF bonds is important for the U.S. dollar. Just last week Brazil pledged $10 billion purchase IMF bonds. That's a far cry from the day's when Brazil was synonymous with hyper-inflation and a poster child for coming to the developed world hat-in-hand.

But there's more to the story, especially with China. Some estimate that China has as much as $1.3 trillion of foreign reserves, most of it in dollars. And right now, China is putting that money to work stockpiling commodities and supporting its economy. So buying Chinese stocks, especially Chinese commodity stocks, is a great idea right now.

At SmallCapInvestor PRO, we just loaded up on Chinese stocks. I believe this is the one reliable growth story in the world today. I've got a Special Report ready with my top investment recommendations; you can get a copy HERE. 

Interest rate concerns and inflation worries put pressure on stocks today after the government's sale of $19 billion had a harder than usual time getting buyers. Investors seem concerned about the government's growing debt and that it could spur higher inflation and interest rates.

The Dow lost 24.04 points to close at 8,739.02; the Nasdaq shed 7.05 points to end the trading session at 1,853.08; and the S&P was down 3.28 points for 939.15.

Stocks comprising the Russell 2000, comprised of the 2,000 largest small-cap stocks, brought the index down to 523.41 on a loss of 4.52 points.

Today's small-cap gainers were lead by communications firm Atlantic Tele-Network (Nasdaq:ATNI) up 42.29% at $37.92. ATNI was up on news from yesterday's announcement to acquire wireless assets from Vodaphone (NYSE:VOD) and Verizon Communications (NYSE:VZ). Primarily doing business in the Caribbean, ATNI now picks up nearly a million wireless subscribers in the U.S. southeast and Illinois and Ohio. Because of regulatory requirements on Verizon to sell off some subscribers as part of its deal with Alltell, ATNI is substantially changed from a small operator overseas to a real player in the U.S. market.

Other small-cap leaders include one of yesterday's leaders, Satyam Computer Services (NYSE:SAY) up 35.7% after being rated "overweight" by an analyst from JP Morgan; American Axle & Manufacturing (NYSE:AXL), another of yesterday's leaders, up 25.7%; and Corel Corp. (Nasdaq:CREL) up 34.75%.

Decliners were lead by NCI Building Systems (NYSE:NCS) down 26.1% on worries over its reports of larger than expected Q2 losses. Shares were going for $3.16 at market close, down from an opening price of $3.80.

Other small-cap decliners include one of yesterday's leading gainers, Sequenom (Nasdaq:SQNM). Yesterday SQNM lead small-cap gainers with a 45.97% gain but today lead decliners by shedding 22.83% of its opening price to close at $4.09. And after shedding 20.17% off its price yesterday, Quiksilver (NYSE:ZQK) saw shares drop another 12.71%. So far this week investors holding shares in Quiksilver have endured a total loss of 27% since Friday's close.

*****"The worst is to come…"

That's what MetLife's (NYSE:MET) Chief Investment Officer Stephen Kandarian told Bloomberg this morning.

He was talking about commercial mortgage defaults. He notes that "[t]ypically there's a lag between when the economy softens and when the defaults actually occur."

Bloomberg also cites a study from Real Estate Econometrics LLC that forecasts default rates for commercial real estate may hit 4.1% by the end of the year.

What does commercial real estate have to do with an insurance company? Plenty…

*****Insurance companies take in cash in the form of the premiums we pay. They then invest that money in order to pay off claims down the road. As their investment returns compound, they profit.

But when their investments lose money, trouble starts. And trouble is exacerbated when insurance companies sell guaranteed returns to investors in the form of annuities.

The promise of annuities forces insurance companies to seek riskier investments to boost their returns. And many have turned to mortgage-backed securities to make more money.

Whoops.

*****MetLife has a $300 billion investment portfolio. That portfolio lost 23% in the first quarter of this year. Mr. Kandarian freely admits he's looking for higher returns to make up the losses. And he's looking at adding securities backed by commercial mortgages, in addition to continuing to originate loans to the commercial real estate sector.

It reminds me of the gambler, who after suffering a big loss, decides to start doubling down and taking more risks to win his money back. It usually doesn't end well.

Of course, what he should do is simply step away from the table. But MetLife and other insurers can't -- they have to make money to meet their obligations. It's not a sure thing, but I can imagine it ending poorly for some insurance companies.

As of press time, 4:00 P.M. Eastern, stocks on the broader indices were up. The Dow was down 2.49 points to 8,762, the Nasdaq up 17.73 points to 1,860.13, and the S&P 500 was up 3.22 points to 942.42.

The Russell 2000, the index tracking the 2,000 largest small cap stocks, was up 4.02 points, or 0.77%, to 528.57.

Leading today's small cap gainers was Sequenom (Nasdaq:SQNM) up 45.97%. Sequenom provides genetic analysis products for biomedical research, molecular medicine, and non-invasive prenatal testing. As I've been saying for the past couple weeks, the sector rotation to defensive stocks like biotech and healthcare has started.

Other small caps showing leadership today include Spreadtrum Communications (Nasdaq:SPRD) up 23.76%; Satyam Computer Services (NYSE:SAY) up 34.93% on surprising the market with profits from the December quarter; Movado Group (NYSE:MOV) up 25.8%; and American Axle & Manufacturing (NYSE:AXL) up 22.45% after having broken through it's 200 day moving average for the second time since over a year ago and despite reporting that it will encounter production shutdowns due to the bankruptcy proceedings of General Motors (OTC:GMGMQ.PK) and Chrysler.

Showing the wrong kind of leadership in today's session-that is, the biggest decliner-was youth fashion creator Quiksilver (NYSE:ZQK) shedding 20.17% off it's opening price to be at $2.88 at press time. Shares dropped precipitously after it was announced that Quiksilver's profit was a penny shy of analysts' estimates.

Other stocks with investors seeing red today include LCA-Vision (Nasdaq:LCAV), provider of LasikPlus, down 14.11%; famed golf equipment maker Callaway Golf (NYSE:ELY) down 15.8% on news of it's dividend cut from 7 cents per share to just one cent per share; CBL & Associates Properties (NYSE:CBL) down 12.8% after releasing its full year outlook below consensus expectations and announcing an offering of 50 million shares of common stock.

*****Bravo. The government's handling of the financial crisis and recovery should be recognized as a masterful performance. At least, so long as you don't look too deeply into the numbers…

Bernanke and Co. have managed to restore confidence to the point that economist Paul Krugman has joined the ranks of those who think we are only a couple months away from actual GDP growth.

And they've accomplished this remarkable feat by stringing investors along with one carrot after another…

*****The first carrot was bailouts and stimulus packages. There was a time when stimulus spending was going to save or create 3.5 million jobs. Now, states are wondering where the stimulus money is. And the president is now promising 600,000 jobs will be created by stimulus spending.

But layoffs have slowed considerably according to the most recent non-farm payroll report. And Americans, feeling more secure in their jobs, may not notice that stimulus jobs won't be there, even if they need them.

*****The Public-Private Investment Program (PPIP) was supposed to remove toxic assets from bank balance sheets. Never mind that the banks probably never had any intention of selling at fire-sale prices and investors weren't thrilled with paying unreasonable prices, no matter how much of the transaction would be funded by the Treasury.

Geithner's "stress tests" resulted in banks raising their capital bases. That has helped remove the incentive to dump those toxic assets. 

And as for the $74 billion banks have raised so far, do not misunderstand all the talk of "green shoots". These green shoots were not economic recovery per se. Rather, the green shoots were the banks stock prices shooting higher after accounting rule changes allowed them to show a profit where there was none.

In other words, the economic recovery is something akin to an illusion -- those inflated stock prices have allowed the banks to raise enough capital to appear healthy and last a little while longer…

*****Now that investors have breathed a sigh of relief that the problems with the auto industry are being resolved, the Chrysler sale to Fiat has been put on hold. Funny, I would swear a couple weeks ago, Chrysler would go bankrupt and millions would lose their job if Fiat didn't buy Chrysler right away.

*****And then there's TARP - the $700 billion boondoggle. Some banks have been asking to repay the money for months. But ever-sensitive to the all-important timing element of a good comedy, the Treasury has been unwilling to accept payment.

After all, why spoil the party by letting all the good news out at once? Why not wait until the rally is looking weak to release the news that, hey, maybe we'll accept TARP repayments after all? And maybe those payments will be more than anyone expects?

But let's make sure we string the announcement out as long as possible and let the threat of good news keep the bears at bay…

*****Of course, you can only fool all of the people for a while. Eventually, without a real pickup in economic activity, the millions of Americans who are barely keeping their head above water will sink. And then all the issues the "stress tests" glossed over (higher unemployment, rising foreclosure rate, etc.) will cripple the banks once again.

As economist Joseph Stiglitz of Columbia University recently told Bloomberg: "There's a chance that it might work...If it does, then they'll look like the brilliant general. But all these efforts also bank on the economy recovering and housing prices not falling too much further. Those are not safe assumptions."

P.S. I normally don't like to be the guy who says "I told you so", but for today I will. Back when the PPIP was first floated by the Treasury my diligent research in my Top Stock Insights advisory service spotted three stocks that would profit big time if the PPIP went through and profit modestly even if it did not. We did it. In a matter of weeks - not months or years - we profited on Legg Mason (NYSE:LM) for 8.16%, BlackRock (NYSE:BLK) for 9.1%, and AllianceBernstein (NYSE:AB) for 12.77%. Top Stock Insights readers booked these gains DESPITE the collapse of Geithner's PPIP plan. To find out how you can see steady and consistent gains no matter what happens, check out Top Stock Insights at http://www.topstockinsights.com/.

Small-cap stocks started out the week with a whimper, extending Friday’s slide as investors unload stocks amid fears about corporate profits during one of the worst recessions in history. Energy and commodity markets were hammered today, which escalated selling interest in companies with close ties to physical markets and reinforced worries about the slumping economy in front of another push of data later this week. The Russell 2000 (NYSE:IWM) closed down 12.50, or 2.60%, at 468.80, the lowest daily close of 2009. For the year, small caps are down 6.1%, while the Dow is off 3.4% and the S&P 500 is down 3.7%. The fact that small caps are still leading the way down so far this year is cause for concern, running contrary not only to bottoming hopes, but also a season that is supposed to favor small caps.

Financial stocks – particularly banks – joined commodities as a noteworthy soft spot for equities today, but in reality the pain was spread around just about everywhere. Looking at S&P sectors, only distillers and packaged food companies had noticeable gains; meanwhile sizable declines in the double digit range were found in all of the following sectors: industrial real estate investment trusts, tire and rubber companies, metal and mining stocks, coal producers, homebuilders, diverse financial services firms, steel companies and construction firms.

Energy stocks were a big drag on the market, with the Energy Select Sector SPDR Fund off 3.8%. Crude oil futures in the U.S. closed down nearly 8%, shedding $3.24 down to $37.59. But the story in commodities today comprised much more than just energy; grains markets were ravaged, with corn sinking some 7% in the morning to touch limit losses. Meanwhile, gold lost 4% and the Gold and Silver Index fell 6.5%, with mining stocks among the worst performers on the day. While some of the losses in commodities might have been exacerbated by a strong dollar, it is primarily a reflection of soft demand amid difficult times. The Commodity Research Bureau Index fell 4% today, which is a big one-day moving for an index that reflects price action in 19 different physical markets.

Today marks the unofficial start of first-quarter earnings season, and investors were bracing for plenty of bad news on the profit front. After the close, Alcoa Inc. (NYSE:AA) reported a larger-than-expected loss. Alcoa closed down . . ..

Small-cap stocks edged lower in a fairly weak start to this week’s trading, pulled down by worries about corporate profits as we enter the unofficial start of earnings season this afternoon. Energy and commodity stocks were a source of worry early today as crude oil futures extended the recent slide. At 9:57 a.m. ET, the Russell 2000 (NYSE:IWM) was down 5.31, or 1.10%, at 475.99.

Crude oil prices tumbled more than $2 a barrel into the U.S. stock market opening, which could pull down energy stocks. The dollar was firm against the euro this morning, which could also weigh on other commodity markets and stocks with close ties to physical markets.

Tying together the commodity and profit themes, Alcoa Inc. (NYSE:AA) kicks off the earnings season after the close today. The firm already announced plans to slash 13,500 jobs and reduce output and will release quarterly results after the close today.

Overseas markets were lower coming into today’s session, which likely weighed on the market as well. In European and Asian trading, bank stocks and chipmakers were taking a hit. Here in the U.S., investors will watch progress on a deal between Citigroup Inc. (NYSE:C) and Morgan Stanley (NYSE:MS), in which Citigroup plans to sell its Smith Barney brokerage unit to raise cash.

The market did take a hit on Friday and the news so far today was soft, but not overly surprising, which could make it difficult to attract fresh selling, especially ahead of a raft of economic numbers later this week. There was an acquisition deal involving a small-cap firm this morning, and when deals get done, it often stokes bullish enthusiasm, especially in the small-cap arena.

Advanced Medical Optics Inc. (NYSE:EYE) will be purchased by Abbot Laboratories Inc. (NYSE:ABT) for $1.4 billion, which sparked a big rise in EYE shares on the opening. EYE was up 144% on the news.

Other small caps on the move this morning included Satyam Computer Sevices Ltd. (NYSE:SAY), which was down 90% as the NYSE finally opened up trading on the embattled Indian outsourcer and the U.S. markets caught up with the . . .

Small-cap stocks got hammered today as worries about the economy amid rising unemployment and fresh profit warnings in the technology sector sparked a wave of selling. The Russell 2000 (NYSE:IWM) notched the best performance of the year Tuesday and followed it up with the worst performance in quick order, losing 17.61, or 3.42% to 497.10. The Russell also slipped into negative territory for the first time this year, and is now off 0.5%, while the Dow is down 0.1% and the S&P 500 is up 0.4%.

There really was no safe port in today’s storm. Usually when stocks are getting whacked you will see money flow into credit markets, or get parked in gold, or maybe find a home in energy or some other commodity goods market. But today, equities were lower, Treasuries were lower, the dollar was lower, crude oil was lower, grains were lower, and gold was lower; heck, even livestock futures were slaughtered today. Just four trading days into the New Year, everyone got a harsh reminder that an economy in recession with credit yields near record lows is not a pleasant position for investors or businesses.

Bears woke up with a roar this morning as the ADP National Employment Report ...

Small-cap stocks remained sharply lower into mid-session, but were up from the extreme morning lows. Losses were stirred by worries over the economy, a revenue warning from key tech player Intel Corp and news of a big fraud from a major Indian outsourcing firm. At 12:33 p.m. ET, the Russell 2000 (NYSE:IWM) was down 11.90, or 2.31% at 502.81.

President-elect Obama addressed several issues at mid-morning, ranging from the Middle East situation to the economy. He said that his stimulus plan will likely be at the high end of expectations, which likely helped pull stocks off the morning lows. Equities markets in the United States and even around the world have embraced talk of a major infrastructure spending plan forwarded by Obama. Obama said that he will deliver a major speech on the economy and the stimulus package on Thursday. He is slated to take over as President on January 20.

Ahead of the opening today, the ADP National Employment Survey reported that 693,000 private sector jobs were lost in December, which was a record high for the ADP report (the data base started in 2001). That figure was way above the consensus ...

Small-cap stocks went into a tailspin in early trading, pulled down by a gloomy report on the jobs front ahead of Friday’s key employment release. In addition, some big companies announced plans to slash workers or cautioned on the outlook, which sent a chill into a market that started out the year on a decent roll. At 9:59 a.m. ET, the Russell 2000 (NYSE:IWM) was off 9.96, or 1.93% at 504.75.

The big scare this morning came from the ADP National Employment survey, which showed that the private sector lost a stunning 693,000 jobs in December, way above the 476,000 lost in November and also well clear of the forecast for a decline of 480,000. This marked the largest decline since the ADP report was started back in 2001. The methodology for this report was tweaked, which could take some edge off the big decline in jobs, but the market clearly was stressed by the report. The ADP data also will heighten concerns about the employment picture ahead of Friday’s big ...

U.S. stocks are expected to open lower, pulled down by declines in Europe where mining, bank and energy stocks were on the defensive. In addition, a private employment survey this morning came in weaker-than-expected, which could heighten worries about the big jobs report coming up Friday. The Dow is expected to open about 125 points lower, while the Russell 2000 (NYSE:IWM) is seen down about 1.2% near 508.50.

The ADP National Employment Report showed a startling drop in jobs of 693,000, way above the forecast for a decline of 480,000. The initial response to the report was a drop in stock index futures and a bounce in credit markets.

Crude oil prices slipped from flat levels to a loss of about $0.70 a barrel on news that ...

Small-cap stocks rejected a morning pullback to close higher on the day, backing up the euphoric FOMC rate cut rally with an impressive showing given early weakness. Tuesday’s FOMC rise was powered by financial and homebuilder stocks, while today’s climb branched out to retailer, selected commodity and telecom names. The Russell 2000 (NYSE:IWM) closed up 3.75, or 0.78%, at 486.59 and is now down 36% for 2008. Meanwhile, the Dow was down 1.12% on the day, and is down 33% for the year, while the S&P 500 was down 0.96% Wednesday and down 38% for 2008.

Action today was noticeably calm after the big rate cut rally Tuesday. Investors were likely pondering just how the Federal Reserve would bolster the economy now that interest rates for short-term loans from the government are basically at zero. One clear path would seem to be buying longer-dated instruments, and Treasury markets were higher throughout the day, although down quite a bit from the morning rise when equities were on thinner ice to start the session.

On the retailer front, Macy’s Inc. (NYSE:M) jumped some 18%, leading the S&P Retail Index to a decent 1.8% gain on the day. Small-cap firms such as Abercrombie & Fitch Co. (NYSE:ANF) rose 3.9%. Retail sales reports have been spotty through this difficult holiday season, but Best Buy Co. Inc. (NYSE:BBY) shot higher Tuesday ahead of the FOMC news on a solid earnings report.

Selected commodity areas provided support to the stock market today, with metals, mining, gold and steel companies counted among the top performing sectors. Some of the bullish edge may have been taken off commodities however as crude oil prices plunged this afternoon, sinking some 8% to the lowest level in more than four years. The sell-off in crude took place right in the face of an announced production cut by OPEC leaders. Perhaps the sting of OPEC’s proposed cut was limited by the fact that non-members Russia and Mexico did not weigh in to support a pullback in production. Interestingly, even though crude oil prices slumped to four-year lows, . . .

Small-cap stocks edged into positive ground into midday trading on support from commodity names, but in general the market appeared to be in a “breather” mood after Tuesday’s manic upside push when Federal Reserve policy makers surprised the market with aggressive interest rate cuts. Some of today’s small-cap gainers are Satyam (NYSE:SAY), Safe Bulkers Inc. (NYSE:SB) and VeriFone Inc. (NYSE:PAY).

Other Market Watch highlights today included:

• Price action so far today in small caps has been pretty tame, with volume light and trading ranges tight.  
• Top performers today are health care facilities, coal stocks, commercial printers, railroads, mining and metal stocks and steel companies.  
• Crude oil prices held relatively steady despite a hefty 2.2 million barrel a day output cut pushed through by OPEC members.
• Real estate investment trusts (REITS) were among the poorest performers so far today, as were houseware and home furnishing stocks. 

Small Cap Gainers:

• Satyam on Tuesday said it would spend $1.6 billion to purchase family-owned infrastructure companies; shareholders revolted, stock plunged 55%. Satyam's chairman backed away from the deal overnight, stock is now up 41%. See (NYSE:SAY).  
• Safe Bulkers Inc. jumped 25% and is now up 165% from the November lows. See (NYSE:SB).  
• VeriFone Inc. rose 24% as the electronic payment technology firm reported earnings in line with expectations and forecast profits above the projection. See (NYSE:PAY).  
• Energy Conversion Devices is climbing above 10% despite a maintained "sell" rating by Citi. See (Nasdaq:ENER).  

Small Cap Losers:

• MWI Veterinary Supply Inc. tumbled 19% as the distributor of animal health products erased a huge chunk of a recent rally in one fail swoop. See (Nasdaq:MWIV).  
• Leggett & Platt down 10% after it cuts Q4 guidance. See (NYSE:LEG). 
• MarineMax secures amendment of credit agreement; shares topple 8%. See (NYSE:HZO).  
• Northstar Realty Finance Corp. down 8% on lower-than-average volume. See (NYSE:NRF).  

Small-cap stocks edged into positive ground into midday trading on support from commodity names, but in general the market appeared to be in a “breather” mood after Tuesday’s manic upside push when Federal Reserve policy makers surprised the market with aggressive interest rate cuts. At 12:20 p.m. ET, the Russell 2000 (NYSE:IWM) was up 0.03, or 0.01%, at 482.87.

In addition to the natural pause in bullish enthusiasm after such a memorable rally Tuesday, today’s profit reports were lackluster at best and pretty much anything tied to homes, homebuilders, home furnishings or real estate was struggling. Real estate investment trusts (REITS) were among the poorest performers so far today, as were houseware and home furnishing stocks. Companies such as Newell Rubbermaid Inc. (NYSE:NWL) and Leggett & Platt Inc. (NYSE:LEG) were taking a hit, down 28% and 10%, respectively.

Financial stocks were a drag on the market today, with the Financial Select Sector SPDR Fund off about 1.7%. Citigroup Inc. (NYSE:C) was down some 4.7% and Bank of America Corp. (NYSE:BAC) was off about 2.9%.

Crude oil prices held relatively steady despite a hefty 2.2 million barrel a day output cut pushed through by OPEC members. Skepticism about OPEC’s ability to hold the line on production might account for some of the lack of rally response in energy markets, as well as concerns that slumping global demand remains on the radar screen for some time to come. Energy stocks were slightly higher even though crude oil prices were calm; commodity markets in general likely found underlying support from yet another dramatic slide in the U.S. dollar, which was down 2.2% against the euro and off 1.3% against the yen, setting 13-year lows against the latter currency.

Looking at individual S&P sectors, the top performers included health care facilities, coal stocks, commercial printers, railroads, mining and metal stocks and steel companies. Interestingly, the saga of a bailout package to automakers seems to have simmered down a tad amid all the FOMC hoopla, but Tuesday afternoon Treasury Secretary Henry Paulson said that automakers would get funds as quickly . . .

Small-cap stocks stormed higher Tuesday, extending a morning rally when investors got word that the Federal Reserve slashed interest rates to the lowest level in history and hinted that they wouldn’t hesitate to utilize other tactics to help jolt the moribund economy out of one of the worst recessions since the Great Depression of the 1930s. The Russell 2000 (NYSE:IWM) rose 30.28, or 6.69%, to 482.35, the highest daily close since Nov. 13. For the year, the Russell is still down 37%, while the Dow is off 33% and the S&P 500 is down 38%.

The FOMC stunned the market by slashing rates by 75 to 100 basis points, well beyond the 50-bp cut that was expected. Policy makers also made no bones about their mission right now: save the economy, worry about prices later. In fact, the Fed’s own statement said they would “employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability.” With prices sinking as evidenced by today’s CPI report, the clear goal is economic growth. Now that the Fed is basically handing out money free of charge to those with access to the Fed window, the next order of business would appear to be attacking long-term interest rates, either through direct purchases or other means. The action was bold and stock market investors liked the approach.

It will be interesting to see if the heightened focus on long-term rates will provide a spark to the moribund housing market. Housing starts numbers released this morning tumbled to the lowest rate in history and slumped 18.9% on a seasonally adjusted rate. Despite the gloomy picture of the housing market, homebuilder shares took off today, attracting bottom-fishers on hopes that a light at the end of the tunnel . . .

The Russell 2000 (NYSE:IWM) closed up 6.7% today, thanks to the Fed’s decision to cut the key interest rate to the lowest level on record. Some of today’s small-cap gainers are Genworth Financial (NYSE:GNW), The Pennsylvania Real Estate Trust (NYSE:PEI) and Terra Industries (NYSE:TRA).

Other Market Watch highlights today included:

• The housing starts report came out at an annualized rate of 625,000 units, which was well below the forecast of 730,000.
• Housing starts tumbled 18.9%, the largest drop since March 1984 and the lowest unit rate on record.
• The CPI came in at -1.7%, which was even lower than the -1.2% projection, but not a surprise given steep declines in energy costs. 
• Homebuilder shares retain a potential bottom on long-term charts and were back on an upside tilt today after sinking on Monday.
• Another clear source of strength today came from insurance stocks, with the S&P Insurance Index climbing throughout the day.
• The Fed cut its target for the key interest rate to the lowest level on record and promised to use "all available tools" to combat the severe financial crisis and possible prolonged recession.

Small Cap Gainers:

• Small-cap firm Genworth Financial Inc. soared some 25%, climbing to the highest point since early November. See (NYSE:GNW).
• The Pennsylvania Real Estate Investment Trust jumped 22% on news that the company completed a financing deal. See (NYSE:PEI). 
• Terra Industries Inc. rallied 19% as the fertilizer company also . . .

Small-cap stocks extended the rally into mid-session trading, boosted by a bounce in the financial arena, which has been a notable source of weakness in previous days. In addition, homebuilder, retailer and insurance firms were strong performers today and the raft of companies fitting those profiles in the small-cap universe helped the Russell 2000 (NYSE:IWM) outperform the Dow and S&P 500. Some of today's small-cap gainers are Genworth Financial Inc.(NYSE:GNW), Terra Industries Inc. (NYSE:TRA) and Maidenform Brands Inc (NYSE:MFB).

Other Market Watch highlights included:

• The market now will go into a waiting mode for the 2:15 p.m. ET FOMC policy announcement.  
• Another clear source of strength today came from insurance stocks, with the S&P Insurance Index climbing 4.2%.  
• It was interesting to see homebuilder shares doing so well today despite a terrible report on housing starts, which tumbled to a record lows and were off 18.9%.  
• The ISE Homebuilder Index was up 5.6%, with small-cap firm KB Home (NYSE:KBH) rising 7.1%.

Small Cap Gainers:

• Small-cap firm Genworth Financial Inc. soared some 40%, climbing to the highest point since early November. See (NYSE:GNW).  
• Terra Industries Inc. rallied 13% as the fertilizer company also mounted a big bounce off Monday’s pullback. See (NYSE:TRA).  
• Maidenform Brands Inc. rallied 15% as the intimate apparel maker mounted a recovery off Monday’s big decline. See (NYSE:MFB).  
• Novatel Wireless Inc. names new VP of sales and general manager; shares rise 13%. See (Nasdaq:NVTL). 

Small Cap Losers:

• Satyam Computer Services Ltd. tumbled 56% on unusually heavy volume as the Indian software firm said it will invest $1.6 billion on two infrastructure firms. See (NYSE:SAY).
• Tech company Stec lowers Q4 revenue view, shares fall 15% in pre-market. See (Nasdaq:STEC).  
• Cabot Corporation "repositioning" in light of weaker demand; shares tumble 10%. See (NYSE:CBT).  
• Monolithic Power Systems lowers guidance below estimates; shares dip 4% in pre-market. See (Nasdaq:MPWR).

Small-cap stocks extended the rally into mid-session trading, boosted by a bounce in the financial arena, which has been a notable source of weakness in previous days. In addition, homebuilder, retailer and insurance firms were strong performers today and the raft of companies fitting those profiles in the small-cap universe helped the Russell 2000 (NYSE:IWM) outperform the Dow and S&P 500. At 12:31 p.m. ET, the Russell was up 12.84, or 2.84%, at 465.41.

The financial sector got a lift from Goldman Sachs Group Inc. (NYSE:GS), which reported quarterly results that were awful, but which the market embraced as a sign that “the kitchen sink” was tossed into the loss. GS shares were up 9.1% at midday. The Securities Broker Dealer Index was up 5.6% and the KBW Bank Index was up 3.6%.

Homebuilder shares have been on a roller coaster ride lately, but retain a potential bottom on long-term charts and were back on an upside tilt today after sinking on Monday. The ISE Homebuilder Index was up 5.6%, with small-cap firm KB Home (NYSE:KBH) rising 7.1%. It was interesting to see homebuilder shares doing so well today despite a terrible report on housing starts, which tumbled to a record lows and were off 18.9%.

Retail stocks also were doing well today after Best Buy Co. Inc. (NYSE:BBY) reported strong quarterly results and cost-cutting efforts to brace for a potentially sluggish holiday season. BBY shares were up 15.2% today and the S&P Retail Index rose 2.3%.

Another clear source of strength today came from insurance stocks, with the S&P Insurance Index climbing 4.2%. Small-cap firm Genworth Financial Inc. (NYSE:GNW) soared some 40%, climbing to the highest point since early November.

The market now will go into a waiting mode for the 2:15 p.m. ET FOMC policy announcement. The Fed is widely expected to lower the Fed funds target by 50 basis points down to 0.5%, but futures markets are pricing in a 60% chance for a 75-bp cut. The big reaction will likely come from the Fed’s statement, as the . . .