Tag - GBTB

The Russell 2000 (NYSE:IWM) closed lower on news that Wachovia Corp. (NYSE:WB) suffered a first-quarter loss. The small-cap index fell 2.09 points, or 0.30%, to 686.07. The Dow Jones Industrial Average declined 23.36 points, or 0.19%, to 12,302.06.

On a year-to-date basis, the Russell 2000 has shed 10.44%, while the Dow is off 7.26% and the S&P 500 is down 9.54%.

The bears and the bulls tangled but the bears were eventually victorious as investors reacted to news before the opening that Wachovia Corp. (NYSE:WB) swung to a first-quarter loss and will sell common and preferred stock to raise capital.

The Charlotte, N.C.-based bank has been relatively less exposed to the subprime mortgage mess than the other major financial institutions, leading to speculation that more players will report losses.

Banks were among the worst hit industry groups today. Among those . . .

The Russell 2000 (NYSE:IWM) has pared some of its earlier losses as investors take a second look at economic and financial data.

At 11:48 a.m. ET, the small-cap index was down 0.70 points, or 0.10%, to 687.46. The Dow Jones Industrial Average was off 21.90 points, or 0.18%, to 12,303.52.

Small-cap stocks began the session lower but have since been moving erratically, twice briefly venturing into the green, as investors try to make sense of mixed news.

The major bearish news came before the start of trading when Wachovia Corp. (NYSE:WB), the fourth-largest U.S. bank, reported that it swung to a first-quarter loss. The Charlotte, N.C.-based company also cut its dividend and said that it will sell common and preferred stock to raise capital.

The announcement led to declines in the financial services sector. Among those whose stock price is sagging is small-cap multi-bank holding company . . .

The Russell 2000 (NYSE: IWM) bounced around but eventually posted a modest gain following news of strong U.S. job growth in October. The small-cap index added 2.60 points, or 0.33%, to 797.78. The Dow Jones Industrial Average (INDU) gained 27.23 points, or 0.20%, to 13,595.10.

On a year-to-date basis, the Russell 2000 has increased 1.32%, while the Dow has added 8.98% and the S&P 500 has gained 6.57%.

Labor markets are tight and job growth is stronger than expected, the U.S. Labor Department reported this morning. Non-farm payrolls increased 166,000 in October, more than double the projected rise of 80,000. That’s a sign that the U.S. economy will most likely avoid recession. Payrolls increased a downwardly adjusted increase of 96,000 in September.

The unemployment rate stayed at 4.7%.

“The October employment report showed unexpected strength in the labor market, but largely on account of services,” said Arun Raha, vice president of Economic Research and Consulting for the North American operations of reinsurance company Swiss Re, in an email. “However, the overall economy remains tentative given the weakness in the housing market and high energy prices.”

The jobs report also showed that average hourly earnings increased $0.03, or 0.2%, to $17.58 during October. That’s 3.8% above the level a year ago, suggesting that the tight labor market is not pushing up inflation.

Stocks opened with solid gains, but the bullish mood was short-lived as investors turned their attention to an article in The Wall Street Journal that claimed that Merrill Lynch & Co. Inc. (NYSE: MER) has made deals with hedge funds to postpone when it records losses due to bets made on securities backed by subprime mortgages. The New York-based financial services giant may have to write down $10 billion in losses, according to the article.

Shares of GB&T Bancshares Inc. (Nasdaq: GBTB) have appreciated on news before the start of trading that the multi-bank holding company will be acquired by SunTrust Banks Inc. (NYSE: STI) for $153.7 million in stock.

Shareholders of Gainesville, Ga.-based GB&T Bancshares will receive 0.1562 shares of SunTrust common stock for each share of GB&T common stock held. After the close of the acquisition, scheduled for the second quarter of 2008 pending regulatory approval, GB&T Bancshares’ banks will merge with those of Atlanta-based SunTrust.

“In light of the difficult economic conditions and the prospect of continued deterioration in the residential real estate markets, we have taken a $14.1 million loan loss provision in the third quarter to increase our loan loss reserves,” said GB&T Bancshares president and CEO Richard Hunt. “We view the opportunity to join forces with SunTrust as a positive move during these difficult times.”

SunTrust’s president and CEO James Well said in statement, “With this transaction we're taking advantage of an unusually attractive and timely opportunity to efficiently expand our Metro Atlanta franchise.”

The bank, which operates 1,685 retail branches and 2,533 ATMs in 11 states and the District of Columbia, said that its acquisition of GB&T Bancshares will not affect its 2008 earnings.

GB&T Bancshares is a seven-bank holding company with 30 banking offices and a mortgage company serving the Atlanta region.

At 3:48 p.m. ET, shares of GB&T Bancshares (GBTB) were up $1.90, or 22%, to $10.70. That’s far from the 52-week high of $22.86, which was touched on Nov. 21, 2006. The 52-week low of $8.75 was set on Nov. 1.

The Russell 2000 (NYSE: IWM) is moving erratically this afternoon as trading is choppy halfway through the session. At 1:23 p.m. ET, the small-cap index had added 2.45 points, or 0.31%, to 797.63. The Dow Jones Industrial Average (INDU) was down 10 points, or 0.07%, to 13,557.87.

Small-cap stocks went on a rollercoaster ride during the first half of today’s session as investors reacted to both bullish and bearish news.

The bulls appeared first, encouraged by news before the opening that non-farm payrolls increased 166,000 in October, according to the U.S. Labor Department. That’s more than double the projected rise of 80,000, a sign that the labor market remains tight and that the U.S. economy will most likely avoid recession. Payrolls increased a downwardly adjusted increase of 96,000 in September.

The unemployment rate stayed at 4.7%.

But the bulls relished for just a few minutes before yielding the floor to the bears.

Investors turned their attention to an article in The Wall Street Journal that claims that Merrill Lynch & Co. Inc. (NYSE: MER) has made deals with hedge funds to postpone when it records losses due to bets made on securities backed by subprime mortgages. The New York-based financial services giant may have to write down $10 billion in losses.

News of the article, which was published before the start of trading, spooked investors and spread fears concerning the extent of damage from this summer’s credit squeeze. Financial stocks immediately took a hit and dragged down the rest.

The Russell 2000 (NYSE: IWM) futures are higher on news of an unexpectedly strong October jobs report.

Non-farm payrolls increased 166,000 in October, the U.S. Labor Department reported this morning. That’s significantly above the projected increase of between 80,000 and 90,000 and a welcome sign that the labor market remains strong despite problems in the housing sector. Payrolls rose 96,000 in September.

The unemployment rate is holding steady at 4.7%.

Elsewhere, investors will also be paying attention to numbers on factory orders for September, which will be released by the U.S. Census Bureau at 10 a.m. ET. Economists are expecting a slight decline.

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

Biggest percentage gainers:

• RadiSys Corp. (RSYS), up 21% on news of a narrower third-quarter loss.
• Vanda Pharmaceuticals Inc. (VNDA), up 19% on news it said it no longer intends to offer convertible senior notes.
• GB&T Bancshares Inc. (GBTB), up 15% on news it is being acquired by SunTrust Banks, Inc. (STI).

Biggest percentage losers:

• Glu Mobile Inc. (GLUU), down 24% on news of a third-quarter net loss.
• Universal Electronics Inc. (UEIC), down 12% despite news of a solid third-quarter.
• Trump Entertainment Resorts, Inc. (TRMP) down 12% despite news of a higher third-quarter profit.