Tag - COMS

As of press time, 2:00 P.M. Eastern Time, stocks have jumped on Federal Reserve Chairman Ben Bernanke's comment that he believes that the U.S. economy is on the verge of recovery.

Currently in Jackson, Wyoming for the annual Federal Reserve conference, Chairman Bernanke stated, "the prospects for a return to growth in the near term appear good", however warning that lending-a key driver of U.S. economic activity for businesses and consumers alike-has not yet returned to normal.

Indeed, looking to the future Mr. Bernanke said, "Looking forward, we must urgently address structural weaknesses in the financial system, in particular in the regulatory framework, to ensure that the enormous costs of the past two years will not be borne again."

The Dow as trading at 9,479, up 129 points; the Nasdaq was at 2,011, up 22 points; and the S&P 500 was up 15 points, trading at 1,022.

The Russell 2000, a composite of leading small-cap stocks like 3Com (Nasdaq:COMS), Oilsands Quest (Amex:BQI), Palm (Nasdaq:PALM), and Scholastic (Nasdaq:SCHL), was 12 points to 580.

Advances were leading declines by a margin of 4 to 1 on the NYSE and 7 to 3 on both the Nasdaq and Amex exchanges.

Leading price movers in the small-cap space include Sinclair Broadcast Group (Nasdaq:SBGI), up 42%; Wireless Ronin Technologies (Nasdaq:RNIN), up 40%; and Rentech (Amex:RTK), up 21%.

*****We all know that it's news that moves the stock market. But it's also true that not all news is created equal...

3Com Corporation (Nasdaq:COMS) said ahead of today’s opening it is raising its guidance for the first quarter of fiscal 2009. For the period ending Aug. 29, the Marlborough, Mass.-based company expects revenues between $335 million and $340 million, up from previous forecasts of $325 million and $330 million. Analysts are expecting revenues of $327.7 million. In a statement, 3Com said its raised guidance is due to better-than-expected performance from the company’s China operations. The networking solutions provider said it should post its fiscal first quarter earnings during the third week of September.

Shares have gained 11% today. At 11:27 a.m. ET, the stock is at $2.08, up $0.22 from Monday’s close. Trading volume is at more than 5 million shares, about 1 million shares above the average.

Small-cap stocks are expected to open solidly higher, buoyed by short-covering ahead of this afternoon’s FOMC policy announcement amid ideas the market is oversold on short-term indicators. The Russell 2000 (NYSE:IWM) was up 0.6% overnight, which suggests an opening near 711.50.

Durable goods orders for May came in unchanged, which was slightly softer than the median forecast for a rise of 0.1%. Equity index futures were able to hold sway with overnight gains despite the soft number. Durables have a history of being volatile, so it typically is going to take a bigger surprise than 0.1% to spark a meaningful move in the market.

Earlier this morning, the MBA mortgage application survey came in at minus 9.3%, which was the lowest level since July 2001. In addition, the report showed that the purchasing index fell 7.4% to the lowest point since February 2003. Also, the refinance index tumbled 12.1% to the lowest level since July 2001. With the housing market still soft and rates firming, mortgage activity has slowed to a crawl. Data on new home sales is slated for release later this morning at 10:00 a.m. ET.

The crude oil market was down ahead of the stock market open, waiting for today’s weekly inventory data. The market is anticipating a drawdown on crude oil stocks. The U.S. dollar was up marginally overnight, gaining about 0.2% against both the euro and the yen. The greenback will likely be influenced by this afternoon’s FOMC statement toward the inflation picture.

Equities markets overseas were primarily higher overnight, which should lend a little support to U.S. stocks this morning. Europe shares were lifted by comments from ECB President Jean-Claude Trichet that he did not envision a series of rate hikes. In Asia, China stocks were up 4.1%, while Hong Kong rose 0.8%, Taiwan 1.5%, . . .