Tag - EBHI

Small caps spiked out of the gate and remained at lofty levels as oil slumped and the dollar climbed, taking the limelight off Fannie Mae’s staggering loss and lower-than-expected productivity gains.

At 12:47 p.m. ET, the Russell 2000 (NYSE:IWM) soared 16.35, or 2.29% at 729.76, while the Dow crusaded 235.55, or 2.06%, to 11,666.98.

Oil has pulled back on the session as the dollar continues to stage a rally initially triggered by the ECB’s dovish comments Thursday. Talk that a damaged pipeline in Turkey could be fixed sooner than anticipated also pushed down crude. A barrel of crude oil slumped $3.58 to roughly $116 at midday. Oil has dropped as low as $115 during the session.

Today’s slide in crude is welcome as oil’s rise has zapped so much of consumers’ spending power, which accounts for two-thirds of the economy.

The greenback continues to make major strides against the euro and the yen. The dollar was roughly $1.50 versus the euro, marking major appreciation from the greenback’s close of $1.53 Thursday.

Small-cap stocks pushed higher in early trading, buoyed by a sharp rally in the U.S. dollar and a pullback in crude oil prices, which helped offset renews jitters about financial stocks after Thursday’s rout. At 10:02 a.m. ET, the Russell 2000 (NYSE:IWM) was up 7.46, or 1.05% at 720.87.

The market is on notice once again about the credit crunch after American International Group (NYSE:AIG) reported huge debt write downs Thursday. Financial shares were starting out on a weak note today as well, pulled down by sloppy results from Fannie Mae (NYSE:FNM) as the government-sponsored mortgage lender missed the forecast and slashed dividends. FNM shares were off 15% shortly after the open and its sister company Freddie Mac (NYSE:FRE) was down 5%. Financial stocks were pounded Thursday and could be on the defensive again ahead of the weekend. Bank of America Corp. (NYSE:BAC) was down 1.5% after an analyst downgrade.
 
The big story today is a dramatic rally in the U.S. dollar overnight, which exploded 1.5%, or more than 230 basis points against the euro. And although the extreme move versus the euro will capture the most attention, the greenback was busy flexing its muscles all over the world. For instance, the dollar made 17-month highs against the British pound, 11-month highs against the New Zealand kiwi, 12-month highs against the Canadian looney and 5-month highs against the Swiss franc...

The Russell 2000 (NYSE: IWM) and the other major U.S. indices rallied and ended the day in the green on news that the Fed may move to lower interest rates. The small-cap index added 8.09 points, or 1.14%, to 720.21, its second consecutive rise. The Dow Jones Industrial Average (INDU) advanced 117.78 points, or 0.92%, to 12,853.09.

On a year-to-date basis, the Russell 2000 has retreated 5.98%, while the Dow is down 3.10% and the S&P 500 has shed 3.27%.

Stocks small and large began the day in negative territory but rallied in the second half of the session and closed with solid gains.

“In light of recent changes in the outlook for and the risks to growth, additional policy easing may well be necessary,” U.S. Federal Reserve chairman Ben Bernanke told an audience at the Women in Housing and Finance and Exchequer Club this afternoon.

Those words sparked speculation that the Fed is preparing to lower the federal funds rate at its two-day meeting starting Jan. 29. The bulls took charge of the session and pushed stocks higher.

The federal funds rate, the rate at which commercial banks make overnight loans to each other, currently stands at 4.25%.

The Russell 2000 (NYSE: IWM) and the other major U.S. indices are posting gains on news of a possible interest rate cut. At 2:46 p.m. ET, the small-cap index had advanced 7.49 points, or 1.05%, to 719.61. The Dow Jones Industrial Average (INDU) was up 135.59 points, or 1.06%, to 12,870.90.

“In light of recent changes in the outlook for and the risks to growth, additional policy easing may well be necessary,” U.S. Federal Reserve chairman Ben Bernanke told an audience at the Women in Housing and Finance and Exchequer Club this afternoon.

Those comments sent stocks rising and fueled speculation that the Fed is considering lowering the federal funds rate. But the bullish mood did not last and within an hour small-cap stocks were back down to their starting level.

Blame the bearish mood on the uncertain economic environment.

The day began with news from U.S. retailers that December sales were weak, suggesting that consumer spending is slowing. That would be a negative development, since consumption is about 70% of gross domestic product.

Economic growth is already being weighed down by the slump in the housing sector and higher energy costs.

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%.

Eddie Bauer Holdings, Inc. (Nasdaq: EBHI), a specialty retailer that sells casual sportswear and accessories, said late Thursday that they have made a voluntary prepayment of $20 million on an existing term loan facility.

After the prepayment, there is a balance of approximately $196 million outstanding on the term loan.

The small cap noted that it is currently in compliance with all financial covenants under the term loan, even without giving effect to the voluntary prepayment.

Shares of Eddie Bauer (EBHI) gained $0.38, or 6.3%, to $6.41 at 10:15 a.m. ET. Shares of Eddie Bauer have been trading in the range of $$5.56 and $14.27 for the past 52 weeks.

A new management team with a back-to-basics strategy, coupled with a beaten-down stock price, could make this small cap retail play an attractive medium-term turnaround opportunity.

The past 12 months have been quite a roller coaster ride for shareholders of outdoor casual sportswear and accessories retailer Eddie Bauer Holdings, Inc. (Nasdaq: EBHI). In February of this year, shareholders of the $209 million market capitalization company rejected a buyout offer at $9.25 a share from two private equity firms. By June, with Eddie Bauer shares touching the $14 level and a newly named CEO at the helm, rejecting this deal looked like a smart move.

However, after weaker-than-expected sales and rising expenses in recent months, Eddie Bauer shares have been punished, wiping away its summer gains and then some. As of this writing, the stock is now trading around the $6 level, near its lowest levels since being spun off in 2005 from its former parent, Spiegel Inc., as part of that company’s Chapter 11 bankruptcy reorganization.

Founded in Seattle, Wash., in 1920, Eddie Bauer has endured a rocky road in recent years, but still retains a solid brand name and retail footprint with 390 apparel and outlet stores throughout the United States and Canada, and a catalog sales and online operation. Revenue for fiscal 2006 topped $1 billion. Veteran retail manager Neil Fiske was named Eddie Bauer’s new CEO in June. Fiske may be unable to turn things around at ailing Eddie Bauer, but he isn’t new to the retail turnaround game. He previously led the successful turnaround of Bath & Body Works, a $2.5 billion in revenue division of Limited Brands, Inc. (NYSE: LTD). Earlier this month, Eddie Bauer also named several other veteran retail executives to fill out its new management team.

Christopher & Banks Corp. (NYSE: CBK), Servidyne, Inc. (Nasdaq: SERV) and Glen Burnie Bancorp (Nasdaq: GLBZ) are among the biggest percentage losers in Friday's trading among companies with market capitalizations under $500 million.

Here are today's biggest percentage gainers:

Howard Gross, interim CEO of Eddie Bauer Holdings, Inc. (Nasdaq: EBHI), outlined initiatives in a Tuesday conference call after the close of trading that he said will position the struggling company toward consistent profitability.

Gross named seven plans for the company’s future:
• Leveraging Eddie Bauer’s “unique outdoor heritage”

• Implementing back-to-basics merchandising

• Focusing on the company’s core 30- 54-year-old customer

• Expanding and exploiting its outerwear market position

• More product-specific, rather than wardrobe, marketing

• Continuing with rollout of loyalty program. Gross said the company has over 1.1 million customers enrolled.

• Pursue selected brand marketing and advertising

While reticent to provide guidance to investors, Gross said the Redmond, Wash.-based company planned to open 21 new retail stores and eight outlet stores in 2007. However, Gross said the company also plans to close 29 retail stores and 1 outlet store.