Tag - CVLT

Small-cap stocks extended the upward march much of the day Wednesday, lifted by tame consumer price inflation data this morning, which eased some concerns that the Federal Reserve’s tightening gun was coming out of the holster sooner than expected. However, the rally sputtered in the final hour of trading, and the Russell 2000 (NYSE:IWM) closed down 0.79, or 0.11%, at 736.07. On the face of things, it might not seem like a big deal to only lose 0.11%, but a lower close when making new five-month highs serves up a potential topping pattern on charts that raises a caution flag heading into action Thursday and Friday.

After yesterday’s glut of Fed speakers inundated the market, many traders came away with the interpretation that Federal Reserve policy makers were turning hawkish, preparing to fight inflation. However, this morning’s CPI reading was seen as a sign that inflation remains at bay — at least for now — which should buy the market some time before rate hikes become plausible. The CPI headline number came in at 0.2%, just below the 0.3% forecast, while the “core” reading, which excludes food and energy, was up 0.1%, also below the 0.2% projection.

While gains in large caps were fairly broad-based Wednesday from a sector perspective, homebuilder and retailer stocks appeared to be especially giddy about the prospect of delaying rate hikes down the road. The S&P Retail Index jumped about 1.6% on the day, with Macy’s Inc. (NYSE:M) rising about 4%. Among homebuilders, DR Horton Inc. (NYSE:DHI) was up over 2% and Lennar Corp. (NYSE:LEN) . . .

Small-cap shares edged higher on the opening, supported by a reversal rally that was triggered ahead of the opening by a tame inflation report. At 9:53 a.m. ET, the Russell 2000 (NYSE:IWM) was up 3.24, or 0.44%, at 740.09.

The CPI (Consumer Price Index) headline figure came in at 0.2%, which was below the forecast of 0.3%. The “core” reading, which excludes food and energy costs, came in at 0.1%, also below the median forecast of 0.2%. The CPI report suggested inflation wasn’t raging out of control, which sparked a reversal in fortune for equities in the overnight session, and the buyers remained in place for the regular opening.

“Headline consumer inflation rose moderately in April because a sharp rise in food prices was partially offset by no change in energy costs,” Steven Wood, chief economist with Insight Economics, said in an email. “Meanwhile, core consumer inflation rose only slightly with largely offsetting price accelerations and decelerations in the various expenditure categories. Although energy prices are expected to rise sharply over the next several months, weakening economic activity over the next several quarters should help cap the gains in core inflation. Although the Fed is currently on hold, at least temporarily, they have heaved a collective sigh of relief with the release of this data,” Wood said.

The market appeared to take away a perception of a hawkish tone from the array of Federal Reserve speakers that were out and about Tuesday, and the CPI . . .

MCG Capital Corp. (Nasdaq: MCGC), MAKO Surgical Corp. (Nasdaq:MAKO) and Pharmaxis Ltd. (Nasdaq:PXSL) were among the new 52-week lows established during Tuesday's trading among companies with market capitalizations or values under $750 million.

CommVault Systems, Inc. (Nasdaq:CVLT), Duckwall-ALCO Stores, Inc. (Nasdaq:DUCK) and Marlin Business Services Corp. (Nasdaq:MRLN) were also among the 52-week small-cap lows.

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

The Russell 2000 (IWM) fell as comments from Fed officials stating that inflation remains a concern erased early gains. The small-cap index fell 9.09 points, or 1.30%, to 692.49, its third consecutive decline. The Dow Jones Industrial Average (INDU) lost 65.03 points, or 0.53%, to 12,200.10.

On a year-to-date basis, the Russell 2000 has decreased 9.60%, while the Dow has let go 8.03% and the S&P 500 is missing 9.66%.

“It will be necessary to continue to monitor inflation developments carefully,” Philadelphia Federal Reserve Bank President Charles Plosser said in a speech to the Birmingham Rotary Club this afternoon. “With inflation creeping up, we have to be particularly alert for rising inflation expectations.”

Similarly, Richmond Federal Reserve Bank President Jeffrey Lacker told an audience at Marshall University’s Lewis College of Business that the risks of a recession have recently increased while inflation has not moderated as some expected, according to news reports.

Higher inflation makes it difficult for the U.S. Federal Reserve to boost the economy with cuts to the target federal funds rate for fear that lower interest rates could drive inflation even higher.

The Russell 2000 (NYSE: IWM) has jumped higher than the Dow following news of an unexpectedly robust increase in productivity.

At 12:49 p.m. ET, the small-cap index had added 5.01 points, or 0.71%, to 706.59. The Dow Jones Industrial Average (INDU) had climbed 54.30 points, or 0.44%, to 12,319.43.

Small caps are leading the rally that followed news that U.S. worker productivity grew more than expected during the fourth quarter as employers cut working hours.

The U.S. Labor Department reported before the start of trading that productivity increased at an annual rate of 1.8% during the final three months of 2007, higher than the 0.5% rate expected by economists.

The total number of hours worked decreased 1.5% during the fourth quarter after declining 0.3% during the third quarter.

Unit labor costs, which are a key measure of inflation, rose 1.6% after falling 1.9% in the third quarter. Economists had forecasted a rise of 3.8%. The lower-than-expected increase is good news for the U.S. Federal Reserve, which has recently shifted its focus from fighting inflation to stimulating economic growth.

Increases in labor costs must be matched by productivity increases in order to keep inflation in check.

Separately, the Mortgage Bankers Association announced before the opening that its measure of mortgage loan application volume rose 3% for the week ended Feb. 1, while the our week moving average is up 10.4%.

CommVault Systems, Inc. (CommVault) creates and markets Unified Data Management solutions for high-demand networks.  CommVault Systems offers a suite of data management applications under the Simpana (formerly QiNetix) brand. 

Data management systems include: backup, disaster recovery, data migration, archiving, discovery, usage tracking and systems troubleshooting.   CommVault also offers professional consulting services worldwide.

CommVault Systems, Inc. (CommVault) creates and markets Unified Data Management solutions for high-demand networks.  CommVault Systems offers a suite of data management applications under the Simpana (formerly QiNetix) brand.