Tag - CAO

The Russell 2000 (NYSE:IWM) jumped today on news of better-than-expected economic data and hopes that the credit crunch is ending. The small-cap index rose 22.67 points, or 3.30%, to 710.64. The Dow Jones Industrial Average climbed 391.47 points, or 3.19%, to 12,654.36.

On a year-to-date basis, the Russell 2000 is down 7.23%, while the Dow has shed 4.61% and the S&P 500 is off 6.69%.

Stocks opened in the green and the bulls completely dominated the session on news before the opening that UBS AG (NYSE:UBS) will issue up to $15 billion in new stock and receive help from other banks in order to deal with $19 billion in writedowns stemming from the subprime mortgage mess.

Separately, Lehman Brothers Holdings Inc. (NYSE:LEH) announced before the opening that it will raise a higher-than-expected $4 billion in preferred stock.

Investors took the actions as a sign that the credit crunch is easing.

Among the winners today was small-cap Team Inc. (Nasdaq:TISI), which provides maintenance and construction services for high-temperature piping systems. The Alvin, Texas-based company reported . . .

Beasley Broadcast Group, Inc. (Nasdaq:BBGI), Helicos BioSciences Corp. (Nasdaq:HLCS) and CSK Auto Corp. (NYSE:CAO) are among the biggest percentage gainers in Tuesday's trading among companies with market capitalizations under $750 million.

EnteroMedics Inc. (Nasdaq:ETRM), Crawford & Company (NYSE:CRD.B) and Idenix Pharmaceuticals, Inc. (Nasdaq:IDIX) are also among the top small-cap percentage gainers.

Here are Tuesday's biggest percentage gainers:

Shares of CSK Auto Corp. (NYSE:CAO) are rising on news before the opening that the automotive parts retailer will be purchased rival by O'Reilly Automotive, Inc. (Nasdaq:ORLY) for about $1 billion, including approximately $500 million of debt.

“After careful consideration of a number of viable alternatives, our board has determined that partnering with O’Reilly is clearly the best course of action for our shareholders,” said CEO Larry Mondry in a press release.

At 1:58 p.m. ET, the stock had added $2.24, or 24%, to $11.55.

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


• CSK Auto Corp. (CAO), up 51% on news it has received an unsolicited bid from rival O’Reilly Automotive Inc. (ORLY) for $352 million in stock.
• Viad Corp. (VVI), up 23% on news it swung to a fourth-quarter profit.
• BankUnited Financial Corp. (BKUNA), up 18%.


• BioForm Medical, Inc. (BFRM), down 18% on news that net sales for the second quarter rose but did not meet analysts’ projections.
• Omnicell, Inc. (OMCL) down 20% on news that fourth-quarter earnings met Wall Street’s forecast.
• Agilysys, Inc. (AGYS), down 13% on news that fiscal 2008 third-quarter profit fell 90%.

CSK Auto Corp. (NYSE: CAO) shares are plummeting after the auto parts retailer disclosed in a regulatory filing that it is seeking an amendment to its credit agreement in order to minimize the possibility it won’t be able to comply with its current credit agreement.

The Phoenix, Ariz.-based company is attempting to lower its fiscal 2008 fixed charge coverage ratio — a proportion that indicates a firm’s ability to meet its financing expenses such as leases and interest — to a range of 1.15 to 1.25, from a current 1.40.

CSK Auto also wants to change its fiscal 2008 leverage ratio — a measurement used to estimate a company’s ability to meet financial obligations — to a range of 4.50 to 6, from its current range of 3.25 to 4.

The company previously disclosed that its second-quarter net sales decreased compared to a year earlier. CSK said it anticipates that its auto segment will not be in compliance with its current credit agreement at the end of the fourth quarter. Although the firm said it expects the auto segment to be able to obtain an amendment to its credit agreement, CSK said “no assurance can be given that the company will be successful in doing so or at what price such amendment can be obtained.”

CSK expects to file its quarterly report on or before Dec. 19.

Cid Wilson, a senior analyst for research firm Kevin Dann & Partners LLC, lowered his rating on the company to “hold” from “buy” with a 12-month price target of $10.

“It appears hitting targets on debt covenants continues to challenge the company,” Wilson said. “The concern here is that the new covenants brings to question what the cash flow situation is.”

The Russell 2000 (NYSE: IWM) posted gains today as some of the world’s most influential central banks announced a plan to ease the credit squeeze. The small-cap index rose 5.44 points, or 0.71%, to 771.71. The Dow Jones Industrial Average (INDU) advanced 41.13 points, or 0.31%, to 13,473.90.

On a year-to-date basis, the Russell 2000 is down 2%, while the Dow has added 8.01% and the S&P 500 has climbed 4.94%.

The bulls ran the show today as investors cheered news that the U.S. Federal Reserve and four other major central banks will inject billions into global money markets to boost bank lending.

The Fed will allow depository institutions to receive billions in short-term funds at rates below the ones it normally charges for loans. Similar initiatives were announced by the central banks of Canada, England, Switzerland and the European Union.

The Fed also set that it has created “swap” lines with the European Central Bank and the Swiss National Bank, for $20 billion and $4 billion respectively. That allows the two banks to make dollar loans in their jurisdictions. Previously, foreign central banks were unable to inject funds in anything other than their own currency.

The Russell 2000 (NYSE: IWM) is posting solid gains on news that central banks around the world are pumping cash into money markets. At 2:33 p.m. ET, the small-cap index was up 7.04 points, or 0.92%, to 773.31. The Dow Jones Industrial Average (INDU) had added 67.14 points, or 0.50%, to 13,499.91.

Small-cap stocks are going strong following news before the start of trading that the U.S. Federal Reserve and four other major central banks are joining hands to inject billions into global money markets to boost liquidity and spur lending.

The U.S. central bank will create a Term Auction Facility program to auction term funds to depository institutions against collateral that can be used to secure loans, according to its statement.

The program will provide banks in good financial condition with billions in short-term funds. The loans will be at rates below the rate charged on direct loans from the Fed to banks but will still be backed by the same type of collateral obligations.

A number of major banks have reduced the flow of credit to businesses and consumers following the meltdown in the subprime mortgage market, which left many financial institutions with billions in losses as foreclosures and loan delinquencies made securities backed by subprime mortgages essentially worthless.