Tag - NYSE:TGT

There is no doubt that consumers hurt by the recession want to stretch their dollars. And when it comes to investing in small-cap companies, being a frugal shopper is even more important.

That’s because it’s possible to pay too much for even the best growth stock. In order to make the most of your investment, you need to buy at bargain basement prices.

Finding surplus value is what shopping is all about - regardless of whether you're shopping for shoes, stocks, or really anything imaginable.

Stocks were poised to open lower today and but for a brief few minutes in early trade they generally lived up to the prediction. The Dow shaved 34 points to close at 8,439. The S&P 500 sank 1.5 points to 919, while the Nasdaq closed up 9 points to end the day at 1,838.

Stocks in the Russell 2000 Index, a composite of the 2,000 largest small-cap stocks, bucked the downward trend for the index to close at 513, up 0.78%.

While there was good news about a very modest increase in spending rates, investors seemed most concerned about the boost to the U.S. savings rate to 6.9 percent, up from 5.6 percent in April and significantly up from rates below 1 percent for the period 2005 through 2007. While this could bode well for the longer term economic health of the U.S. economy many analysts see it merely as a side effect to consumer concerns about layoffs, cutbacks, and furloughs.

The increase in the savings rate has come at the expense of consumer spending, which accounts for roughly 70 percent of the U.S. economy. Indeed, many retailers have been battered over the past several quarters as Americans concerned they may receive a pink slip any day shut their wallets to defer spending and switch to lower cost brands for necessities.

Among the stand-outs in retailing are Wal-Mart (NYSE:WMT), Target (NYSE:TGT), and Costco (NYSE:COST). Despite more consumers turning to discount retailers, both WMT and COST have seen year to date share price declines. TGT shares are up nearly 20% for the year.

Despite the modest increase in household spending, retailers are girding for continued earnings pressures as American families prepare for unemployment to reach 10% later this year, up from the current 9.4%.

Leading small-cap gainers today was Zion Oil & Gas (AMEX:ZN) up 76%. Zion runs as a development stage oil and gas exploration firm. Based in Dallas, Texas, the firm holds exploration licenses for onshore development in Israel.

Other small-cap leaders included Cardium Therapeutics (AMEX:CXM) up 48%; Schmitt Industries (Nasdaq:SMIT) up 45%; and Caraco Pharmaceutical Laboratories (AMEX:CPD) up 35%.

Decliners were lead by Design Within Reach (Nasdaq: DWRI), a San Francisco-based furniture store, down 41% after announcing that it expects to delist from the Nasdaq on July 16 with trading ceasing July 6. DWRI has had trouble keeping its share price above $1.00 (a key Nasdaq requirement) for most of 2009 and has indicated that it does not have the working capital to meet the Nasdaq's requirements for staying listed.

Besides DWRI, small-cap price decliners were lead by NewBridge Bancorp (Nasdaq:NBBC) down 37%; Cano Petroleum (AMEX:CFW) down 25%; and Cumulus Media (Nasdaq:CMLS), also down 25%.

Yesterday, the Fed scaled back two of its liquidity-providing programs and announced it would let a third one expire on July 1, 2009.  

Each program was designed to provide liquidity to securities dealers and money-market funds that couldn't raise funds in the capital markets. The Fed noted that none of the programs were used anywhere close to capacity. And the improving economy and loosening of credit markets has made the programs less necessary. 

Investors took this as good news because it suggests the economy and financial system is starting to stand on its own. It's also good news because it shows the Fed is willing to be somewhat proactive in shutting off liquidity.  

To me, this is more important. 

*****In one form or another, the U.S. government has made (read:created) something like $11 trillion available to fight this recession. (I'm not sure anyone knows the exact number.) The government has been widely praised for its response to the financial crisis. Its moves are credited with averting a more serious problem.  

But that's only half the job, and it's the easy half, at that. I expect many of you have seen how a toddler reacts when it's time to give up the pacifier. Kicking and screaming is an understatement. And that's exactly how it will happen when the Fed really starts taking away the liquidity pacifier for good.  

Alan Greenspan never had the stones to give the U.S. economy the tough love it needed. And Wall Street became a spoiled bunch of delinquents.  

Will Bernanke have what it takes to guide the U.S. economy from dependent child to responsible adult? We'll see. And we better hope so, because I suspect the stakes are even higher this time around…  

*****While the U.S. is creating debt to support its economy, China is using its currency surplus to secure raw materials. I mentioned yesterday that China's state-run oil company Sinopec (NYSE:SNP) is trying to acquire an oil exploration company for $7.2 billion. And it wasn't that long ago that China tried to take a $19 billion stake in mining giant Rio Tinto (NYSE:RTP).  

When you're an investor, you have to be worried about opportunity cost. That's the cost of profits that you could have made, if your investment capital wasn't tied up in under-performing or illiquid assets.  

Right now, and probably into the future, the U.S. will be suffering opportunity cost as so much of our resources are tied up in simply supporting our economy. 

*****Case in point: Iraq. Iraq is one the verge of opening the deal-making process for international oil companies to upgrade Iraq's oil fields. This promises to be a very convoluted process - the Kurds and Parliament want input and the current oil minister appears ready to bypass them both.  

All Iraqis realize how important oil, and oil revenue, is to their future, and they're all fighting to get a piece of the action and avoid the exploitive situation that occurred before Saddam Hussein kicked Big Oil out of Iraq. 

For this reason, the proposed development contracts are not guaranteed. There is the risk that a subsequent Iraq government could nullify them and there would be no recourse.  

The risks are high enough that Exxon-Mobil (NYSE:XOM) isn't even sure yet if it will enter the bidding process. But I'll bet you dollars to doughnuts that Sinopec's parent company, China National Petroleum & Chemical Corp. will be bidding.  
Now, obviously, the recession has nothing to do with Exxon's uncertainty. But for China's state-run oil companies, national interests are sometimes more important than profits. And that can be a good thing.

*****Now, here's Jason Cimpl's video analysis of this week's action and look ahead to next week. So far he's batting a thousand. You can view the video HERE or go directly to trademasterstocks.com/videoreport. 

 

Small-cap stocks started out Thursday’s trading session in the red, but quickly bounded back into positive territory showing similar resilience to “bad” news that was seen during Wednesday’s rise. So far today, investors were juggling a raft of disappointing profit reports against the bullish scenario from a fresh batch of rate cuts around the world. At 10:03 a.m. ET, the Russell 2000 (NYSE:IWM) was up 7.20, or 1.59%, at 460.96.

Several big companies announced plans to reduce workforce numbers this morning, reinforcing the concept that the jobs picture will get uglier before it gets better -- a numbing thought ahead of Friday’s big monthly employment release. There was a bevy of companies that either missed the profit forecast this morning, or lowered the outlook, but the one that seemed to spark the biggest response in pre-market trading was E I du Pont de Nemours and Co. (NYSE:DD), as chemical manufacturer DuPont said it now expects to lose money this quarter versus a previous projection for a profit. In addition, DuPont said it would cut 2,500 jobs. AT&T (NYSE:T) said it would slash some 12,000 jobs.

Economic data on weekly unemployment claims came in better than feared, but the expectations were so terrible that the upside surprise on claims didn’t have much kick. After all, the headline figure still came in above 500,000, which is a big number historically. What’s more, the number of Americans extending unemployment insurance because they can’t find a job rose to the highest point in 26 years. Simply put, firms are laying off employees and they can’t find work. The factory orders report this morning came in at minus 5.1%, which was worse than the forecast for a drop of 3.8% and which was the biggest decline in more than eight years.

In overnight action, central bankers around the world were busy slashing interest rates to help bolster sagging economic activity. The European Central Bank sliced 100 basis points off their benchmark rate, bringing it down to 2%. Meanwhile, . . .

Small-cap stocks may have finished out November like a lamb, but they started out December like a lion, sinking hard and fast today in an abrupt about-face from last week’s strong upward surge. Slumping manufacturing reports around the world triggered today’s rout and the only safe place to park money was in credit instruments as financial, industrial, retail and commodity markets were in retreat mode. The Russell 2000 (NYSE:IWM) closed down 56.05, or 11.85%, at 417.09, snapping a string of five consecutive winning sessions with the worst daily loss of the year. The Russell is now down 46% for 2008, while the Dow is down 39% and the S&P 500 is down 44%.

Credit market safe havens were the preferred outlet of choice today, as investors fled stocks and sought refuge in Treasuries – especially after Federal Reserve Chairman Ben Bernanke said that the Fed could buy long-dated Treasuries and that the economy remained under considerable stress. He also said that the Fed’s scope for reducing rates to stimulate growth was limited at this point, but that the U.S. economy was now better equipped to deal with the credit crisis. Yields on benchmark 10-year notes went wild, sinking more than 7% at one point during the day to about 2.7% as strong demand for notes lifted the price and slashed yields. Treasury Secretary Henry Paulson said that recent bailout moves were making progress, that banks should increase lending habits and that he has more programs developing to boost lending. He also said that mortgage rates have not come down as much as hoped and that Americans know the economy is in recession. The market extended the afternoon sell-off as he spoke.

The market got off on the wrong foot today when manufacturing data out of China reflected a big drop in new orders. China is the world’s hub for labor, with widgets assembled there and shipped out around the globe. Then, manufacturing reports out of Europe were dour, setting the stage for a startlingly bad report on manufacturing activity here in the United States. The ISM Manufacturing Survey came in at 36.2, which was below the 38 forecast, and which was also the lowest reading in 26 years. What’s more, sub-index data on prices paid was the lowest in 59 years and the new orders sub-index was the lowest since 1980. This is a heavy week for economic data, and today’s numbers clearly sent an icy shudder through the market. As the week progresses, we’ll see data on vehicle sales, services sector activity, factory orders and weekly claims as we head toward Friday’s big monthly employment release. What’s more, we’ll also have weekly and monthly retail sales numbers to pour over, . . .

Small-cap stocks are expected to open lower, pulled down by reports that Japan has officially entered into a recession for the first time in seven years and by disappointment that the G-20 meeting this weekend didn’t appear to serve up an exciting stimulus package. The world stock index slipped down 0.7%, powered by losses in Europe overnight. Stock index futures were off about 1% ahead of the opening, which would suggest a Russell 2000 (NYSE:IWM) open near 452.50.

Libor rates edged slightly higher overnight and have been correcting up slightly after going down every day for a month. The New York Manufacturing Survey came in at minus 25.4, which was slightly better than the forecast for a loss of 26.1. Still, the number was the worst showing on record (the data series began in July 2001).

On the corporate news front, Citigroup Inc. (NYSE:C) was off about 2% in pre-market trading on media reports that the giant bank plans to slash some 50,000 jobs. Also, tech bellwether Dell Inc. (Nasdaq:DELL) tumbled some 3% in European trading following analyst downgrades. Stocks with potentially bullish tilts include Charles Schwab Corp. (Nasdaq:SCHW) and Amercian Express Co. (NYSE:AXP) which could benefit from a bullish note in Barron’s. Colgate Palmolive Co. (NYSE:CL) received a bullish comment from analysts at Morningstar and ConocoPhillips (NYSE:COP) might get a rise from . . .

Small-cap stocks opened lower, but quickly trimmed losses as enthusiasm fueled by another round of global rate cuts helped soothe the sting of yet another sobering batch of economic reports. At 9:51 a.m. ET, the Russell 2000 (NYSE:IWM) was down 0.74, or 3.83%, at 510.81.

The weekly claims report came in at 481,000, which was below the forecast of 475,000 and which included an upward revision for last week’s figure as well. The most sobering figure on the claims report was the continuing claims number, which was pegged at 3.84 million, the highest level in more than 25 years. Americans aren’t just losing jobs, they are struggling to find new ones too.

The weekly claims data often gets extra emphasis right in front of a monthly employment report, and neither the weekly claims figure or the ADP survey Wednesday have raised hopes for a bullish surprise on the monthly jobs report Friday morning. Just this morning, analysts at Goldman Sachs raised their projection for the decline in non-farm payrolls to 300,000 from 250,000 (the market consensus is minus 180,000). Goldman also was looking for the unemployment rate to climb to 6.4%, a jump of 0.3% from last month.

The market did gather some support from aggressive rate cuts overnight in Europe, with the Bank of England slashing rates by a whopping 150 basis points, which put their benchmark rates at the lowest point in some 53 years. In addition, the European Central Bank lowered rates by 50 basis points, and even the Swiss National Bank lowered rates. ECB President Jean-Claude Trichet said that the central bank will do what is needed to restore financial stability

Tech stocks paced early declines this morning, powered by a somber outlook . . .

In a fitting finish to an exasperating day, small-cap stocks collapsed in the final half-hour of trading as worries about a recession and tight credit lines clouded exuberance tied to a dramatic coordinated global rate cut ahead of this morning’s stock market open. The Russell 2000 (NYSE:IWM) closed down 12.39, or 2.22%, at 546.57, the lowest daily close since August 2004.

It was a turbulent session that saw the market sharply higher ahead of the open, sharply lower shortly after the open, solidly higher in mid-morning, sharply lower at midday, solidly higher with an hour to go, but then finally sinking back into a red sea by the close. For the year, the Russell is now down 28.6%, while the Dow is off 30.2% and the S&P 500 is down 32.9%. At the lows today, the Russell was down 37.1% from the all-time highs.

At approximately 7:00 a.m. ET this morning, the Federal Reserve slashed the target rate for fed funds to 1.5% from 2.0%, which marked the lowest level for fed funds since August 2004. At the same time, central bankers in England, Switzerland, Sweden and China also announced rate cuts, resulting in the first concerted international action on weak economic conditions since the 9/11 attacks seven years ago.

The market appeared to struggle mightily early today with whether or not the surprise global rate cut move was really enough to unclog credit lines and jolt the economy out of the grip of recession. For most of the day, the answer to those questions appeared to be “no.” However, tech stocks led the way back out of the midday slump, apparently driven by bargain hunting and by ideas that access to cheaper money would help investment in technology companies. The tech-laden Nasdaq 100 gave back a 4% afternoon rally by the close, but still managed to finish flat on the day, bouncing off five-year lows in the process. At the trough today, the Nasdaq 100 was down 42% from record highs, near levels consistent with previous recession . . .

Small-cap stocks opened lower, but clawed back to a mild gain about 20 minutes after the open as fear about a recession and tight credit conditions battled overnight euphoria tied to global central bank rate cuts. This marked the first globally coordinated rate cut by central bankers since the 2001 recession in the aftermath of the 9/11 terrorist attacks. At 10:01 a.m. ET, the Russell 2000 (NYSE:IWM) was up 3.53, or 0.63%, at 562.48.

Volatility in the two-hour time frame ahead of the actual market opening has been unprecedented this week. Today saw S&P e-mini futures trade in an astonishing 92-handle range overnight as the market rallied on the rate cut news, then slumped as traders digested the news and decided it wouldn’t necessarily avert recession or unclog credit lines. Unless you were awake early this morning well before the opening, then you never even got to rejoice in a brilliant overnight rally in stock market derivatives.

The market was in retreat mode overnight in the wake of Tuesday’s slide to fresh four-year lows, but when the announcement came out at 7:00 a.m. ET that central bankers around the world were slashing interest rates in concert, it sparked a big relief bounce in equities. European shares went from a stunning 6% loss to a brief positive print, bolstered by not just the coordinated global rate cuts, but also by news that the Bank of England was injecting 50 billion pounds to help the banking business. The news on rate cuts came a little late to rescue Asian stocks, with Japan down 9.3%, Hong Kong off 8.7%, China down 3.7%, Taiwan down 5.7%, Australia off 5%, Singapore down 6.6%, South Korea down 5.2% and India down 3.1%. Trade on Russian and Indonesian shares was halted when they reached 10% declines.

For the record, the Federal Reserve slashed its target rate on Fed funds to 1.5% from 2%, the lowest level since August 2004. Meanwhile, the European Central Bank, Bank of England, Swiss central bank, Swedish central bank and even the Chinese central bank also sliced rates this morning.

Perhaps one early sign that the rate cuts weren’t going to gain immediate traction in the market was that gold prices pushed higher despite the news. Gold is seen as a safe-haven and if that market continues to grind higher, its unlikely money . . .

Small-cap stocks went into a tailspin on the opening as runaway inflation, weak housing starts and the never-ending credit crunch saga cast a bearish pall over the market. At 9:55 a.m. ET, the Russell 2000 (NYSE:IWM) was down 8.53, or 1.15%, at 733.44.

The inflation horizon became more troubling this morning when the Producer Price Index report came out at 1.2%, which was way ahead of the forecast for a rise of 0.6%. The headline figure marked the largest year-over-year rise in 27 years. Recently, investors have tried to shrug off inflation worries, saying that the data is back-dated and that the biggest inflation ingredient — energy — has been on the decline in late July and in August. However, today’s “core” rate of inflation, which excludes food and energy prices, was up a stunning 0.7%, which was far beyond the forecast for a rise of 0.2%. The year-over-year rise in the core rate was the fastest since 1991. Although you can argue that tracking inflation without including energy and food prices is somewhat silly, one thing the core rate shows us today is that inflation is creeping into other areas than just at the gas pump and in the grocery sack.

Rubbing a little salt in the wound was the Housing Starts report, which came out at the same time as the PPI and which also was a disappointment. The headline for housing starts was down 11.0%, slack compared with the forecast for a decline of 9.9%. The rate of July housing starts was at 965,000 units, which marked the lowest level since March 1991. So, housing starts are at 17-year lows and inflation is at 27-year lows. With many market watchers saying that a recovery in the housing market is a necessary start to a recovery in the financial/credit crisis, the numbers today did nothing to help further the bullish argument.

“With sales still soft, and with lending standards tighter, single family housing starts will contract even further,” Steven Wood, chief economist with Insight Economics, said in an email. “Housing’s contribution to economic growth will be . . .

Small-cap stocks reversed course Thursday, pulling back into the recent range as the credit crisis moved to the forefront, punishing financial stocks. The selling mood was also stirred by soft economic data and worries about consumer spending after sluggish sales at benchmark retailer Wal-Mart Stores (NYSE:WMT). In the end, the Russell 2000 (NYSE:IWM) shed 12.48, or 1.72%, to 713.42.

Large-cap financial stocks were getting hammered in the afternoon today, extending a gloom that began after Wednesday’s close when insurance giant American International Group (NYSE:AIG) reported hefty quarterly losses amid write-downs of bad mortgage loans. The whole mess with AIG rekindled fears about the credit crunch and investors dumped shares in a wide swath of financial names. AIG tumbled some 18% on the day. The nation’s top bank, Citigroup Inc. (NYSE:C) stumbled amid news that the firm would buy back some $7 billion in auction-rate securities and pay a $100 million civil fine to settle a suit that it misled investors on the risk of the investments. Citigroup lost about 6% on the day. Merrill Lynch & Co. (NYSE:MER) lost 8%, Lehman Bros. Holdings, Inc. (NYSE:LEH) tumbled 13%, JP Morgan Chase Co. (NYSE:JPM) was down 4% and mortgage finance firms Fannie Mae (NSE:FNM) and Freddie Mac (NYSE:FRE) were down 14% and 9%, respectively. The Financial Select SPDR was down 5%--and it’s not as if those declines are limited to the large-cap banks and brokerage houses. There are dozens of small- and mid-cap banks out there, and they have even more trouble accessing credit during the crunch than the big firms.

As you might expect...

Small-cap stocks put together a solid rally Tuesday, essentially recapturing the lost ground from Monday’s sharp decline. The market got an early boost from sinking crude oil prices, and extended those gains after the FOMC report failed to spark any fresh concerns. The Russell 2000 (NYSE:IWM) closed up 16.90, or 2.40% at 721.04. In the last three weeks, the market has generated one-day rallies of more than 2% on four occasions, which is an unusually large number of singular big-rally days jammed into such a short time frame.

Foreign exchange markets seemed to say that the Fed was on the right path, with the U.S. dollar jumping more than 100 basis points against the euro, and the dollar index climbing to the highest point since mid-June. In general, at this stage of the economic cycle, a strong greenback is seen as a sign of strength for the U.S. economy, and should encourage foreign asset flow into the U.S. stock market.

As for today’s big FOMC report, there was some mild intraday volatility associated with the statement, but the overall response was one of comfort. There is still a diversity of opinion about whether the Fed is in a position to fight inflation with tighter policy because of rising unemployment and soft economic conditions, but there also is a sense that the recent pullback in energy prices and other commodity markets may have provided the FOMC members with some valuable time and breathing room to combat a difficult situation...

With a push from its largest shareholder, little-followed microcap play Crown Crafts Inc. (Nasdaq:CRWS) could be poised to finally unlock shareholder value in the coming quarters.

On July 3, Gonzalez, La.-based Crown Crafts announced a settlement agreement with Wynnefield Capital, its largest shareholder. The agreement averts a proxy contest showdown between the long-time shareholder and the designer of infant and toddler bedding, blankets and accessories. As part of the settlement, Crown agreed to add a Wynnefield nominee to the company’s board of directors. Crown also agreed to form a strategic review committee to explore strategic alternatives. Wynnefield is permitted under the agreement to increase its ownership stake in Crown up to 20%. The investment firm currently holds around a 15% stake.

Following a successful restructuring in 2001, Crown has maintained profitability since 2002 through a combination of organic and acquisition-driven revenue growth and sensible moves to clean up its capital structure. The $32 million market capitalization company is the largest producer of infant bedding, bibs and bath items in the United States. Crown’s products are marketed under a variety of company-owned trademarks, such as NoJo and Hamco, as well as licensed trademarks. The sale of products under licenses from Walt Disney Co. (NYSE:DIS) accounted for 30% of total revenue in fiscal 2008. Crown’s top customer is Wal-Mart Stores Inc. (NYSE:WMT), followed by privately held Toys “R” Us, Inc., and Target Corp. (NYSE:TGT).

For fiscal 2008 ended March 30, Crown reported revenue of $74.9 million and net income of $4.4 million, or $0.43 a diluted share, compared with year-ago revenue of $69.2 million and net income of $3.9 million, or $0.39 a diluted share. This reported net income total for fiscal 2007 excluded a gain on refinancing, net of taxes, . . .

Small caps edged higher Friday, underpinned on buying in the tech sector, benign economic data and by traders eager to put money back into stocks after a solid showing this week. Buying interest was curbed however, from those willing to book month-end profits and by lingering concerns about lofty energy and commodity prices. The Russell 2000 (NYSE:IWM) finished out the day up 2.73, or 0.37%, at 748.28.

For the month of May, the Russell rose 4.5%, climbing to the highest monthly close since December. Small caps trounced many of the large-cap index products this month. The Dow was actually down 1.4% in May, while the S&P 500 was up 1%.

The star performers today came from the tech arena, buoyed by impressive earnings from bellwether stock Dell Inc. (Nasdaq:DELL) and by chip designer Marvell Technology Group (Nasdaq:MRVL). The two stocks jumped 6.8% and 23.5%, respectively. The rise in tech stocks today bolstered investor psychology about consumer spending issues amid a difficult economy. Other big-name tech firms attracting buyers today included Cisco (Nasdaq:CSCO) and Hewlett-Packard (NYSE:HPQ). The Philadelphia Stock Exchange’s key index on semiconductor shares (CVE:SOX) jumped 2.3%.

Although tech generated much of the power for today’s move (the Nasdaq was up 0.6%, while the Dow was down 0.06% and the S&P 500 up 0.15%), the insurance business got a lift from American Insurance Group (NYSE:AIG), which gained 2.3% on an upgrade from analysts at Morgan Stanley.

Retailer and beverage shares weren’t joining the buying party however, with Costco (Nasdaq:COST) down 2.4%, Target (NYSE:TGT) down 0.4% and Pepsi (NYSE:PEP) off 0.5%. The S&P Retail Index was off about 0.5% for the day.

The market managed to dodge any potential data pitfalls today, as economic reports on income, inflation, manufacturing purchases and consumer sentiment all basically came in benign. Perhaps the biggest relief was on the inflation front, as today’s personal income report showed that the PCE deflator — considered the . . .

Getting toys to market isn’t child’s play, but Jakks Pacific Inc. (Nasdaq:JAKK) is one company that is winning this game.

Shares of the Malibu, Calif.-based company are closing in on the 52-week high of $31.42 seen last July, following a blowout holiday quarter. For investors, the question is whether they should add Jakks Pacific to their toy chest.

The toy industry has had its share of issues to deal with in the past year: a foundering economy, waning interest in non-tech wares, and safety concerns mostly over foreign-made items. Like most toymakers, most of Jakks Pacific’s goods are produced in Asia.

The gaggle of Wall Street analysts who follow Jakks Pacific have issued generally favorable opinions, with four of the nine polled by Thomson Financial having a “buy” or “strong buy” rating. The other five have it at “hold.” The median price target for Jakks is $31.50, and the current quarter is expected to yield $0.19 earnings per share, up 59% from a year earlier. Shares closed Friday at $28.14.

The top toy players are Mattel Inc. (NYSE:MAT), with $6 billion in 2007 revenue, and Hasbro Inc. (NYSE:HAS), at $3.8 billion in revenue. Jakks Pacific ranks third, with 2007 revenue of $857.1 million, a 12% increase from the year before. The company relies on three big customers: Wal-Mart Stores Inc. (NYSE:WMT), Target Corp. (NYSE: TGT) and privately held Toys “R” Us, accounting for a respective 19.3%, 14.5% and 14.1% of 2007 net sales.

Jakks be nimble, and Jakks be quick in locking up licensing deals with the hottest prospects to produce a related game, doll or toy.

Hannah Montana? Sure. NASCAR? Certainly. Toss in World Wrestling Entertainment Inc. (NYSE:WWE), SpongeBob SquarePants, old stars like Rocky, Barney and Pokemon, and the company seems to have a winning line-up. Jakks Pacific has also parlayed such names as Dirt Devil, Pizza Hut and McDonald’s into pretend-play products, while up-and-coming country star Taylor Swift, a Grammy nominee . . .

The Russell 2000 (NYSE: IWM) and the other major U.S. indices are posting modest declines on news of poor December retail sales.
 
At 10:57 a.m. ET, the small-cap index was down 4.72 points, or 0.66%, to 707.40. The Dow Jones Industrial Average (INDU) had lost 29.67 points, or 0.23%, to 12,705.64.

Small-cap stocks started the day in negative territory but quickly recovered as investors apparently weighed news of disappointing December retail sales against news of a government report that showed an unexpected decline in weekly jobless claims.

The bearish pre-market mood was due to news of weak December sales at the major U.S. retailers. The main culprits appear to be the early Thanksgiving holiday, which moved some shopping days to November, as well as the deep discounts that many retailers offered to lure in shoppers.

Small-cap retailers also failed to impress, with music and apparel seller Hot Topic, Inc. (Nasdaq: HOTT) reporting that December same-store sales dropped 6.2%, leading the company to lower its fourth-quarter earnings guidance.

Similarly, Watsonville, Calif.-based boating supply retailer West Marine, Inc. (Nasdaq: WMAR) announced fourth-quarter results that disappointed analysts, while Cost Plus, Inc. (Nasdaq: CPWM) said that holiday same-store sales declined.

On the bright side, apparel retailer Eddie Bauer Holdings, Inc. (Nasdaq: EBHI) announced that fourth-quarter same-store revenue rose 4.8%.

The Russell 2000 (NYSE: IWM) futures are pointing down and the small-cap index will open lower on news of weak retail sales.

Small-cap stocks are set for a bearish opening following news of weak December retail sales. Among the big name retailers seeing disappointing sales is Target Corp. (NYSE: TGT), which reported that net sales for the five weeks ended Jan. 5 increased a paltry 0.1%, compared with 0.6% a year earlier.

Weak retail sales could be a sign of a decline in consumption, a development which could have negative consequences for economic growth since consumption is about 70% of U.S. gross domestic product.

Elsewhere, investors will be paying attention to a speech by U.S. Federal Reserve Chairman Ben Bernanke at 1 p.m. ET.

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


• Spectrum Control, Inc. (SPEC), up 5% on news of a positive business outlook for fiscal 2008.
• LanOptics Ltd. (LNOP), up 4%.
• O2Micro International Ltd. (OIIM), up 3%.


• West Marine, Inc. (WMAR), down 7% on news of a decline in fourth-quarter same-store sales.
• CV Therapeutics, Inc. (CVTX), down 6%.
• Canadian Solar Inc. (CSIQ), down 6%.

 

After dipping in morning and early-afternoon trading, the Russell 2000 (NYSE: IWM) rallied on strong gains from Chinese solar companies. The Dow Jones Industrial Average (INDU) fell throughout the trading day but ended up slightly despite news of weaker-than-expected holiday retail sales and a bleak report on housing prices.

At the close of trading, the small-cap index gained 2.64 points, or 0.33%, to 797.03. The Dow was up 2.36 points, or 0.02%, to 13,551.69.

As the holiday shopping season draws to a close, the latest retail sales suggest the housing debacle and continued high oil prices are claiming the consumer and roiling retailers. News out from Target Corporation (NYSE: TGT) and MasterCard Incorporated (NYSE: MA) in particular are weighing on the indices today.

Discount retailer Target warned on Tuesday that its sales may have declined in the month of December since the Thanksgiving holiday and lowered its same-store sales outlook for the month to a 1% decrease from a 1% increase. This compares with the retailer’s previous forecast of a gain of 3% to 5%.

MasterCard added to the glum retail report after it reported that holiday spending, which includes credit, cash and checks, only rose 2.4% due to softer sales of women's apparel.

The International Council of Shopping Centers-UBS added a broader gauge when it reported its Retail Chain Store Sales Index rose by 2.8% for the week of Dec. 22 from the previous week. The ICSC, however, warned that retail industry sales might not meet its original guidance. Actual December sales figures will not be disclosed until mid-January.

The Russell 2000 (NYSE: IWM) and the Dow Jones Industrial Average (INDU) are continuing to careen for the first session in four trading days after news of weaker-than-expected holiday retail sales and a bleak report on housing prices.

At 1:10 p.m. ET, the small-cap index had shed 0.36 points, or 0.05%, to 794.03. The Dow was down 17.07 points, or 0.13%, to 13,532.23.

As the holiday shopping season draws to a close, the latest retail sales suggest the housing debacle and continued high oil prices are claiming the consumer and roiling retailers. News out from Target Corporation (NYSE: TGT) and MasterCard Incorporated (NYSE: MA) in particular are weighing on the indices today.

Discount retailer Target warned on Tuesday that its sales may have declined in the month of December since the Thanksgiving holiday and lowered its same-store sales outlook for the month to a 1% decrease from a 1% increase. This compares with the retailers previous forecast of a gain of 3% to 5%.

MasterCard added to the glum retail report after it reported that holiday spending, which includes credit, cash and checks, only rose 2.4% due to softer sales of women's apparel.

The International Council of Shopping Centers-UBS added a broader gauge when it reported its Retail Chain Store Sales Index rose by 2.8% for the week of Dec. 22 from the previous week. The ICSC, however, warned that retail industry sales might not meet its original guidance. Actual December sales figures will not be disclosed until mid-January.

The Russell 2000 (NYSE: IWM) and the Dow Jones Industrial Average (INDU) are backpedaling after a poor report on housing prices and weaker-than-expected retail sales. Target Corp. (NYSE: TGT) warned after Monday’s close that December sales may decline and are running below expectations.

At 10:46 a.m. ET, the small-cap index was down 5.2 points, or 0.65%, to 789.19. The Dow was down 41.78 points, or 0.31%, to 13,507.55.

Holiday spending increased 3.6% compared with a year earlier, according to MasterCard Advisors LLC. The increase was less than economists expected. Because gas prices increased during the period, actual sales were less than the reported total.

In economic news, home prices in 20 large U.S. cities dropped 6.1% compared with a year ago, according to a report by Stand & Poor/Case-Shiller. The report said only three areas — Charlotte, N.C., Portland, Ore. and Seattle, Wash.  — showed positive annual growth in home prices.

Separately, Berkshire Hathaway Inc., billionaire investor Warren Buffett's holding company, said it will acquire a $4.5 billion stake, or 60%, of industrial company Marmon Holdings Inc. Berkshire is said to purchase the remainder of the company in stages by 2014.

The price of crude oil rose on worries that shipments from Iraq could be disrupted after the Turkish military attacked bases of Kurdish rebels in northern Iraq.

Biggest percentage gainers:

• Ohio Legacy Corp. (Nasdaq: OLCB), up 23.5% to $6.20
• Shiloh Industries, Inc. (Nasdaq: SHLO), up 20.9% to $10.49.
• China Technology Development Group Corp. (Nasdaq: CTDC), up 20.5% to $6.99.

Biggest percentage losers:

• Immtech Pharmaceuticals, Inc. (AMEX: IMM), down 12.8% to $5.10.
• Carrollton Bancorp (Nasdaq: CRRB), down 11.5% to $11.50.
• Prospect Capital Corp. (Nasdaq: PSEC), down 9.1% to $13.76.

News of strong third-quarter earnings lifted the Russell 2000 (NYSE: IWM) and the Dow Jones Industrial Average (INDU) to a second consecutive positive close. The small-cap index added 8.45 points, or 1.04%, to 818.53. The Dow gained 109.26 points, or 0.81%, to 13,676.23.

On a year-to-date basis, the Russell 2000 has increased 3.95%, while the Dow has added 9.63%.

With no major news on the economic front, investors turned to earnings.

The bullish mood was set after the close on Monday when Apple Inc. (Nasdaq: AAPL) reported a 67% increase in third-quarter revenue, partially driven by strong demand for Macintosh computers.

More good news came this morning when New York-based card issuer American Express Co. (NYSE: AXP) announced that third-quarter profit rose 10%, while telecommunications giant AT&T Inc. (NYSE: T) said that its third-quarter net income increased 41% due to its acquisition of BellSouth Corp.

Among small-cap companies, jet engine components maker EDAC Technologies Corp. (Nasdaq: EDAC) posted a 500% rise in third-quarter profit. Similarly, newspaper publishing company Journal Communications, Inc. (NYSE: JRN) also saw its third-quarter net income climb.

The Russell 2000 (NYSE: IWM) has trimmed its earlier gains and slipped into the red in midday trading, while the Dow Jones Industrial Average (INDU) is holding on to slim gains. At 1:44 p.m. ET, the small-cap index had shed 0.45 points, or 0.06%, to 809.63. The Dow had risen 43.82 points, or 0.32%, to 13,610.79.

Stocks have lost their momentum this afternoon, which came following news of strong third-quarter earnings.

Apple Inc. (Nasdaq: AAPL) set the bullish tone after the close on Monday when it reported a 67% increase in third-quarter revenue, partially driven by strong demand for Macintosh computers.

Also contributing were credit card issuer American Express Co. (NYSE: AXP), which reported before the opening that third-quarter profit rose 10%, and telecommunications giant AT&T Inc. (NYSE: T), which announced that its third-quarter net income increased 41% due to its acquisition of BellSouth Corp.

Futures were pointing north and all indices opened in positive territory. But the enthusiasm from the morning’s earnings reports started to wane around noon, with the bears gaining strength after retailer Target Corp. (NYSE: TGT) lowered its same-store sales forecast for October and Wal-Mart Stores Inc. (NYSE: WMT) said that it now plans less capital expenditures in fiscal 2007 compared with a previous forecast made in June.

Secrets of the consumer are coming undone, exposed by DemandTec’s breakthrough marketing software. DemandTec, Inc. (Nasdaq: DMAN) leaves little to the imagination: its suite of scientifically infused software  tells retailers and makers of consumer products how to attract sales, price goods, run promotions, mold and predict demand, and drive profits.

Trading publicly since August but started in 1999, DemandTec has grown into a leader of commerce software, sporting a client list of the biggest retailers: Wal-Mart Stores, Inc. (NYSE: WMT), Safeway Inc. (NYSE: SWY), Target Corporation (NYSE: TGT), Best Buy Co., Inc. (NYSE: BBY) and Office Depot, Inc. (NYSE: ODP), among others. It also markets to consumer products companies, including Campbell Soup Company (NYSE: CPB), Cargill, PhilipMorris and Johnson & Johnson (NYSE: JNJ).

Even DemandTec would find it hard to better shape its own returns since its initial public offering at $11 per share. Its shares have rallied 50% in a little more than two months, closing Friday at $16.59. The high so far is $18.55 on Oct. 10, hit as the company rallied after second-quarter returns released Oct. 4 exceeded analyst expectations. Its market capitalization has grown to more than $420 million.

Revenues in the second quarter of fiscal 2008 ended Aug. 31 rose 40% from the previous year to $14.7 million. Sequential growth was 11% from the first quarter. The company gets its revenues from customer agreements that cover the use of DemandTec’s software and services that go with it. Revenue is recognized over the term of the agreement, which tends to run two to three years. On a non-GAAP basis, the quarterly loss was $0.02 per share, versus a penny gain in the same quarter a year earlier.

DemandTec also pleased investors by projecting revenues for full fiscal 2008 of $60.2 million to $60.7 million—up 40% year-over-year. The San Carlos, Calif.-based company said on its quarterly conference call that earnings for the year would be $0.07 to $0.08; in the third quarter, DemandTec expects to earn $0.03. 

“DemandTec’s consumer demand management solutions are clearly resonating within the retail and consumer goods verticals and we believe that the company is in the early stages of a multi-year growth opportunity,” analyst Jason Maynard at Credit-Suisse wrote in a research note following the conference call. Maynard repeated his “outperform” rating, saying that the company’s second-quarter results reaffirmed a very attractive small-cap growth story.

If you've ever filled up your gas tank, ordered a meal at a fast-food drive-through or even bought a vehicle from an automotive dealership, chances are you have unwittingly contributed to the success of a little-known small cap.
 
The reason: LSI Industries Inc. (Nasdaq: LYTS), based in Cincinnati, Ohio, supplies indoor and outdoor lighting fixtures, signage, menu boards, LED displays, digital billboards and sports screens to the petroleum/convenience store, multi-site retail (including automobile dealerships, restaurants and national chain stores) and the commercial and industrial lighting markets.

LSI's client list reads like a veritable Who's Who in big business: Ford Motor Company (NYSE: F), General Motors Corporation (NYSE: GM), DaimlerChrysler AG (NYSE: DAI), Exxon Mobil Corporation (NYSE: XOM), BP plc (NYSE: BP), Chevron Corp. (NYSE: CVX), ConocoPhillips (NYSE: COP), McDonalds Corp. (NYSE: MCD), Burger King Corporation (NYSE: BKC), Wal-Mart Stores, Inc. (NYSE: WMT), Best Buy Co. Inc. (NYSE: BBY), CVS Pharmacies, Inc. (NYSE: CVS), Target Stores (NYSE: TGT)...the list goes on.

LSI's creations do the seldom-thought-of, but highly important job of providing essential illumination for businesses and strategic visibility for their products and services. Some of the company's more popular specialty designs are custom backlit menu boards, indoor and outdoor signs and graphics, decorative light fixtures, solid-state LED displays, and most recently, digital billboards.
 
Since having its stock downgraded to "sell" from "hold" by Matric USA analyst Daniel Scalzi on June 22 (after which the stock tumbled from more than $18 a share to $16.40), the visual image-solutions company has been lighting up far more than the usual. In late June, following news that the rollout of re-imaging programs by several large clients would boost the company's fourth-quarter and fiscal year results beyond expectations, LSI began grabbing attention, in a good way.

The Russell 2000 (NYSE: IWM) barely managed to rise while the Dow slipped on a day marked by credit concerns. The small-cap index added 0.93 points, or 0.12%, to 788.38, its fourth consecutive positive close. The Dow Jones Industrial Average (INDU) fell 30.49 points, or 0.23%, to 13,090.86.

With little economic news, credit concerns took center stage today.

Stocks began the day just south of the flat line after U.S. Treasury Secretary Henry Paulson said credit problems that appeared following the meltdown in the subprime mortgage market could slow economic growth.

Paulson also expressed confidence that the United States will safely get through the current rough patch and that the overall economy remains healthy.

Adding to the credit worries was McLean, Va.-based Capital One Financial Corp. (NYSE: COF), which announced that it is closing its wholesale mortgage business due to the decreased profitability of repackaging home loans and selling them in secondary markets.

Elizabeth Arden Inc. (NASDAQ: RDEN) is something more than just a pretty face. Despite a warts-and-all stock performance in the final four months of 2006, the company appears to have undergone a successful makeover that could benefit investors.

And at least one analyst smells the possibility of a takeover at some point, in light of recent market consolidation, of the global beauty and fragrance company.

Elizabeth Arden offers a cadre of fragrances bearing the names of such luminaries as actresses Elizabeth Taylor and Catherine Zeta-Jones, along with motorsports star Jimmie Johnson as spokesman for a NASCAR men’s line.

In addition to Taylor’s long-running White Diamonds brand and other fragrances, and Zeta-Jones, the company has continued to extend its appeal to younger potential customers, marketing products from Mariah Carey, the Brittney Spears’ Curious scent and Hillary Duff’s … with Love brand. Its other more-traditional brands include Geoffrey Beene’s Grey Flannel and Halston. For rugged, four-wheelin’ men, it also has a Hummer fragrance.

Elizabeth Arden began in 1910 as a salon founded by its namesake – who actually was Canadian born Florence Nightingale Graham. From its New York City roots along the always-trendy Fifth Avenue, the company has developed a worldwide appeal for its ever-expanding family of products that have emerged from behind its bright red door.

What started with face creams and cosmetics, Elizabeth Arden began to successfully add fragrances starting in 1935, with one called Blue Grass. Elizabeth Arden Graham was an ardent equestrian and thoroughbred breeder, and named the fragrance after the Blue Grass region of Kentucky, where she had an expansive farm outside of Lexington. Her Jet Pilot won the Kentucky Derby in 1947.

Odd as it may sound, water has become a growth market. I’m referring, of course, not to good, old-fashioned tap water, but rather designer flavored waters that are featured prominently on grocery and health food store shelves. The market for flavored water grew 50% annually between 2001 and 2004 (the latest year for which data were available). Industry analysts forecast the flavored water market will grow to $800 million by 2009, from $168 million in 2004, a greater than four-fold rise.

Sales of flavored water and other non-carbonated drinks are expected to surpass soft drink sales by 2010. This is because consumer tastes are shifting away from traditional sugary soft drinks to healthier “New Age” beverages, which include sodas made from “natural” ingredients, fruit juices and fruit drinks, energy and health drinks, ready-to-drink teas, sports drinks and bottled waters. New Age beverages are distinguished from mainstream beverages by less sugar, less carbonation and natural ingredients.

According to Beverage Marketing Corporation, wholesale dollar sales in the New Age beverage segment were approximately $16.9 billion in 2005. Consumer awareness of the health risks of too much sugar, studies evidencing the athletic performance benefits of proper hydration, and a variety of new beverages/serving sizes are fueling robust sales in the New Age beverage category.

The overall U.S. market for packaged beverages is immense, with total sales estimated at $270 billion in 2005. Sales volume grew 6% annually between 2002 and 2005. Carbonated beverage sales were estimated at $66 billion, or 25% of the total beverage market. Following many years of respectable growth and beginning in 1999, carbonated beverages began to post six consecutive years of less than 1% annual growth and then consumption declines. Despite a declining sales trend, the market for carbonated beverages remains significant, in terms of both volume and sales, and market share remains far larger than any other beverage category.

Two companies that will benefit from the popularity of flavored water and other New Age beverages are Reeds, Inc. (OTCBB: REED) and Jones Soda Co. (Nasdaq: JSDA).

Toronto-based Kaboose, Inc. (TSX: KAB) is North America's largest independent online media company in the kids-and-family market — a sector dominated by giants such as Walt Disney Co. (NYSE: DIS), Time Warner Inc.'s (NYSE: TWX) AOL unit and Viacom Inc.’s (NYSE: VIA) Nickelodeon. Solid planning, creative financing, strategic marketing, and sound partnerships have this small-cap standing strong in the face of stiff competition from larger competitors with well-oiled marketing machines.

Founded in 1999, right before the dot-com bust, Kaboose plowed full steam ahead, aggressively snapping up kid-oriented websites. After a round of acquisitions, the small media company conceded it would never win the battle for children's attention on the Internet, so it shifted gears and targeted their moms. Today, the company runs a string of content-related sites that focus on mothers and young families. Visitors to Kaboose's sites can do everything from staying informed of the latest trends and reading product and service reviews to planning birthday parties and family vacations to creating online photo scrapbooks.

With a Web portfolio including popular sites like BabyZone, ParentZone, Birthday in a Box, Two Peas in a Bucket and the recently acquired image-sharing service Bubbleshare, Kaboose's 120,000 pages of content attract 12 million unique visitors a month and its family of sites have more than 2 million registered users (return visitors who can be tracked and cross-promoted)—a fact that has brought advertisers knocking.

"Kaboose is one of only a handful of Canadian companies that is benefiting from the significant shift in advertising spending from traditional media to online media," Ron Shuttleworth of Jennings Capital Inc., said in a recent report.

"As the company scales and solidifies its position as a pre-eminent destination for families, we expect that Kaboose should capture more share of advertising budgets and higher rates," he wrote.

Last year, the advertising dollars poured in: Kaboose revenues swelled 200% to $11.7 million and in the third quarter of last year, the company recorded its first ever profit, $500,000 (a $1-million turnaround from the same period in 2005). All in all, sales have grown more than 1,000% since 2003. And the company has built an impressive list of business partners, including the likes of McDonald's Corp. (NYSE: MCD), Target Corporation (NYSE: TGT), Hewlett-Packard Company (NYSE: HPQ), DaimlerChrysler AG's (NYSE: DCX) Mercedes-Benz subsidiary, Mattel, Inc. (NYSE: MAT) and M.J. Heinz Company (NYSE: HNZ).

It’s going to take more than an unexpected bear hug to cage Russ Berrie & Company, Inc. (NYSE: RUS) -- the venerable maker of collectible plush lions and tigers and bears, oh my -- and other gift items that keep kids of all ages entertained.

Shares of Russ Berrie have risen 35% in the past three months, but can small-cap investors continue to find value if they jump in now?

The stock established the first of a string of 52-week highs on June 6, after the Oakland, N.J., company said that it had received an unsolicited $18-a-share takeover offer that valued the company at about $380 million.

But the Russ Berrie board thought otherwise, and the company said in a statement that the directors had “determined that this proposal undervalues the company.” The company noted that before receiving the bid, it already was looking into the possible sale of its struggling gift division, and had received some interest “from several prospective acquirers.” It also said that it had hired Sagent Advisors to explore its options, which it identified as selling parts of the company, selling the entire company, or making acquisitions to grow, in order to better compete with such giants as Hasbro, Inc. (NYSE: HAS) and Mattel, Inc. (NYSE: MAT).

The offer did nothing to change the view of analyst Daniel Scalzi of Matrix USA, who has a “strong sell” rating on the company, and he questioned the wisdom of rejecting that price, a tiny premium of about 1.6% of the previous day’s closing share price. He told The Record newspaper in Hackensack, N.J.: “Eighteen bucks a share? They should have taken it.” At TheStreet.com Ratings, however, the stock was upgraded from sell to hold.

U.S. stocks are looking up across the board this morning as growth in weekly crude and gasoline stocks outpaces expectations.  Among small caps, shares of American Technology Corp. (Nasdaq: ATCO) are up on news the company’s products were selected by the U.S. military, while SenoRx, Inc.’s (Nasdaq: SENO) breast cancer device received regulatory approval.

At 11:23 a.m. ET the Russell 2000 had added 4.02 points, or 0.48%, to 843.94.  The Dow Jones Industrial Average was up 47.14 points, or 0.35%, to 13,587.09.

U.S. stocks dropped sharply today following news of ugly April retail sales.  Among small caps, shares of Jupitermedia Corp. (Nasdaq: JUPM) lost on news of a quarterly net loss, while 24/7 Real Media, Inc. (Nasdaq: TFSM) is putting itself on the selling block.

The Russell 2000 lost 16.14 points, or 1.93 percent, to 818.63.  The Dow Jones Industrial Average shed 147.74 points, or 1.11 percent, to 13,215.13, its biggest drop since March 13.