Tag - PLCE

Small-cap stocks opened lower, but quickly trimmed losses as enthusiasm fueled by another round of global rate cuts helped soothe the sting of yet another sobering batch of economic reports. At 9:51 a.m. ET, the Russell 2000 (NYSE:IWM) was down 0.74, or 3.83%, at 510.81.

The weekly claims report came in at 481,000, which was below the forecast of 475,000 and which included an upward revision for last week’s figure as well. The most sobering figure on the claims report was the continuing claims number, which was pegged at 3.84 million, the highest level in more than 25 years. Americans aren’t just losing jobs, they are struggling to find new ones too.

The weekly claims data often gets extra emphasis right in front of a monthly employment report, and neither the weekly claims figure or the ADP survey Wednesday have raised hopes for a bullish surprise on the monthly jobs report Friday morning. Just this morning, analysts at Goldman Sachs raised their projection for the decline in non-farm payrolls to 300,000 from 250,000 (the market consensus is minus 180,000). Goldman also was looking for the unemployment rate to climb to 6.4%, a jump of 0.3% from last month.

The market did gather some support from aggressive rate cuts overnight in Europe, with the Bank of England slashing rates by a whopping 150 basis points, which put their benchmark rates at the lowest point in some 53 years. In addition, the European Central Bank lowered rates by 50 basis points, and even the Swiss National Bank lowered rates. ECB President Jean-Claude Trichet said that the central bank will do what is needed to restore financial stability

Tech stocks paced early declines this morning, powered by a somber outlook . . .

The Children's Place Retail Stores Inc. (Nasdaq:PLCE) rose 4.5% this morning after the company reported flat sales for September, while many other retailers were posting lower sales.

The Secaucus, N.J.-based children’s apparel retailer said before the bell this morning that comparable-store sales were flat and net sales were up 2% compared with last year.

By midday, The Children’s Place is at $31.75, up $1.36 from Tuesday’s close. The stock has traded between $14.92 and $43.40 in the past year.

For detailed price information and news stories on The Children’s Place, click PLCE.

The Children’s Place Retail Stores Inc. (Nasdaq:PLCE) saw its stock rise by nearly 9% this morning after the children’s clothing retailer announced it had swung to a second-quarter profit while analysts were expecting a loss.

The Secaucus, N.J.-based company reported before the bell this morning net income of $11,000, or $0.00 per share, for the quarter ended Aug. 2, compared with a loss of $28 million, or $0.97 per share, a year earlier. Analysts polled by Thomson First Call were expecting a quarterly loss of $0.43 per share.

Excluding one-time charges, The Children’s Place would have reported a loss of $0.03 per share.

The firm said its merchandise assortment for summer was “very well-received by customers” and that its “sharpened” E-commerce marketing and merchandising efforts helped drive web traffic and sales.

By late morning, Children’s Place is at $40.03, up $3.27 from Wednesday’s close, after having reached as high as $42.50 earlier in the day. The stock has traded as low as $14.92 and as high as $42.59 in the past year.

For detailed price information and news stories on Children’s Place, click PLCE.

Small-cap stocks pushed higher Thursday, snapping a string of four consecutive losing days as investors found relief from an intraday reversal in crude oil prices. The Russell 2000 (NYSE:IWM) closed up 5.90, or 0.81%, at 733.01.

“Today was all about reacting to crude oil. In fact, [Wednesday] was about crude oil and Friday is going to be about crude oil. When prices get this extreme at the gas pump, it really makes you wonder if we’re approaching the breaking point for the consumer. If they don’t have discretionary money to spend on things other than gas, then it’s going to have a negative rollover effect on everything else,” said Dominic Boyle, market strategist with Lind-Waldock, in a phone interview.

In order for equity markets to sustain the rally off the March lows, Boyle said, “we will have to get confirmation from crude” in the form of a top, or at least a dramatic slowdown in the escalation of energy prices. After a new record high overnight at $135 dollars a barrel, crude oil futures slipped back to about $131 during the U.S. trading session and left a little potential topping pattern by making new highs and closing lower.

As crude oil tilted off the highs today, the greenback chewed up some recent lost ground, rising about 0.6% against the euro and 1.2% versus the yen. In general, a strong dollar of late has been seen as a positive signal for equities, associated with investment flow into U.S. stocks, and potential unwinding of short dollar/long commodity trades.

In addition, some of today’s upbeat psychology may have been stoked by news of a big acquisition, with NRG Energy Inc. (NYSE:NRG) tendering a bid to purchase Calpine Corp. (NYSE:CPN) for a stock deal worth about $11 billion. If there are . . .

Small-cap shares opened flat and then edged higher, underpinned by news of a big-cap energy acquisition, a firm tone in the dollar, and ideas that Wednesday’s post-FOMC minutes slide was overdone. At 9:52 a.m. ET, the Russell 2000 (NYSE:IWM) was up 2.46, or 0.34%, at 729.56.

News that NRG Energy (NYSE:NRG) tendered a bid to buy Calpine Corp. (NYSE:CPN) for a stock deal worth $11 billion injected some enthusiasm back into the M&A picture this morning, and played a supportive role in market psychology. Calpine shares were up 7.1% shortly after the opening on the news. If there are large-cap merger deals to be done, then there are certainly bargains to be had within small caps.

There are several apparel retailers coming out with earnings today, which could ripple through the markets. Children’s Place Retail Stores (Nasdaq:PLCE), which is right on the upper end of small-cap market capitalization, reported solid quarterly results this morning and the stock was up 6.2% right after the open.

Large caps in the news early today include Pfizer Inc. (NYSE:PFE), which tumbled 1% on the opening on news that its anti-smoking drug had serious side effects. Also, NetApp Inc. (Nasdaq:NTAP) tumbled 5.7% as the company’s forward projections disappointed.

Crude oil prices shot above $135 dollars a barrel overnight, and continue to be a drag on the both the consumer pocketbook and the cost structure for corporations (just ask the battered airline industry). Goldman Sachs technical analyst Kevin Edgeley said in a research report overnight that crude oil momentum and trend strength are pointing higher, and that there is a long-term channel extension target for crude at $142.90. If crude oil were to close lower today, and well off that $135 record overnight peak, it could generate a topping reversal on charts, and is worth . . .

The Russell 2000 (NYSE:IWM) snapped a five-day winning streak as the morning’s bullish sentiment evaporated in the final hour of trading. The small-cap index fell 1.05 points, or 0.15%, to 712.68. The Dow Jones Industrial Average added 3.01 points, or 0.02%, to 12,612.43.

On a year-to-date basis, the Russell 2000 has shed 6.96%, while the Dow has declined 4.92% and the S&P 500 is off 6.53%.

Investors turned their eyes to the corporate sector with no major economic releases scheduled for today. Futures were pointing up and the small-cap index opened in the green on news before the opening that Washington Mutual Inc. (NYSE:WM) is near a deal to receive a $5 billion injection from investors led by private equity firm TPG Inc.

Shares of the Seattle-based savings and loan company, which needs extra cash to deal with liquidity issues stemming from the subprime mortgage meltdown, jumped almost 30% today.

The Russell 2000 reached its highest level of the session shortly before 1 p.m. ET, when the index briefly rose above a level of 720 before beginning . . .

The Russell 2000 (NYSE:IWM) has started the session in positive territory.

At 10:06 a.m. ET, the small-cap index was up 8.16 points, or 1.23%, to 672.29. The Dow Jones Industrial Average (INDU) had climbed 103.56 points, or 0.86%, to 12,203.22.

Futures turned up in the final minutes of pre-market trading and small-cap stocks opened in the green.

In economic news, the U.S. Labor Department reported before the opening that jobless claims for the week ended March 15 increased 22,000 to 378,000. Economists were expecting to see a much smaller increase.

However, some observers say the rise may be attributed to a temporary autoworkers strike.

The Russell 2000 stumbled late Wednesday, finishing down 17.81, or 2.61%, at 664.13, unable to sustain the updraft off Tuesday’s largest one-day gain of the year. In today’s action, support is at 660, then at 654, and critical support is at 650. With the U.S. markets closed Friday for the Good Friday holiday, a weekly close above 650 will be critical for the chart structure, and to keep investors uplifted by the recovery off the lows.

The market could see mild volatility into the opening Thursday. The bigger volatility risk comes at 10:00 a.m. ET with the release of Leading Indicators and the Philly Fed Survey.

The Russell 2000 (NYSE: IWM) futures are down and the small-cap index will open lower on news of weak January retail sales.

The bears are ready to go on news that U.S. retailers reported January sales below expectations, indicating that consumer spending has declined and the economy is headed for, or already is in, a recession.

The Russell 2000 fell hard in the afternoon Wednesday, finishing down 9.09, or 1.30% at 692.49. This marked the third consecutive session that small caps closed below opening levels, the first time that has happened since the Jan. 22 low. Look for support today at 680 and 669, and resistance at 702, 712 and 721.

There are additional Federal Reserve speakers on the agenda today, but it’s unlikely they will carry the same kind of punch that we’ve seen recently. The docket includes Atlanta Fed President Dennis Lockhart at 8:30 a.m. ET, and Dallas Fed President Richard Fisher at 1:00 p.m. ET.

Retailers experienced an anti-climatic end to 2007, as Wall Street began sounding the alarm for recession and caused consumers to pull in their purse strings. The cloud has continued to hang over retail stocks into 2008 and Susquehanna Financial’s outlook for the sector’s fourth quarter and fiscal 2008 cautions that the clouds haven’t dissipated.

“Given the weak consumer environment, we believe retailers that only reported holiday sales and did not provide additional commentary during their sales release have a greater chance of realizing greater volatility heading into fourth-quarter 2007 results,” Susquehanna Financial analyst Michael Thurow wrote in a retailer’s research report today. 

For January, Susquehanna Financial analyst Thomas Filandro is projecting a sector comp decline of 3% to 5%, compared with an increase of 2.5% last January, as the analyst says the majority of the sector employed aggressive promotions.
 
“Although it is unclear whether or not a recession will hit in 2008, it is clear that consumers remain on edge and extremely cautious regarding spending on apparel and accessories,” Filandro wrote.

Looking past January, the analyst says aside from dealing with a skittish consumer, retailers will be faced with an earlier Easter holiday this year that typically shortens the initial spring selling window and may result in higher seasonal markdowns.

The Russell 2000 (NYSE: IWM) and the other major U.S. indices fell today on more financial problems and fears of a consumer slowdown. The small-cap index dropped 15.56 points, or 2.16%, to 704.65. The Dow Jones Industrial Average (INDU) retreated 246.79 points, or 1.92%, to 12,606.30.

On a year-to-date basis, the Russell 2000 has lost 8.01%, while the Dow is off 4.96% and the S&P 500 has shed 4.59%.

The bears were in the driver’s seat today as news of more pain at major financial firms sparked worries that the subprime mortgage mess could take its toll on the American consumer.

Small-cap stocks opened with a drop and never looked up on news that Merrill Lynch & Co., Inc. (NYSE: MER), the world’s largest brokerage house, may incur $15 billion in losses from investments in securities backed by mortgage loans.

Mortgage lenders nationwide frequently packaged loans and sold them as securities to financial companies, and as a result both parties have suffered billions in losses as U.S. home prices started to stagnate in the second half of 2006 and many borrowers defaulted on their loans and went into foreclosure.

Adding to the gloom was New York-based credit card issuer American Express Co. (NYSE: AXP), which announced that it will absorb a fourth-quarter pretax charge of about $440 million due to slower spending by card members and an increase in delinquencies.

As the holiday season officially kicked off this weekend, shoppers flocked to the malls for a better-than-anticipated turnout on Black Friday. However, analysts remain incredulous as to whether Friday’s surprise will continue to spread holiday cheer for retailers through the season.

“With Thanksgiving weekend sales typically accounting for only 10% of holiday purchases, much business has yet to occur,” said Susquehanna Financial analyst Thomas Filandro. “We remain cautiously optimistic that the season will not be a bust and are forecasting moderate specialty sector sales growth of 2% to 4%.”

Lazard Capital Markets analyst Todd Slater disagrees with the prevailing sentiment, calling Black Friday “blue.”

“Most discount and specialty retail stores we visited were disappointed with traffic and conversion relative to last year,” wrote Slater in a research note today.

ShopperTrak RCT reported an 8.3% increase in Black Friday sales and a 7% increase for the Friday and Saturday, above its 4% to 5% expectation, according to Slater.

“While this sounds strong, we have doubts that sales made plan in most cases,” Slater wrote in a research note. “Our view is that sales largely missed plan, and were skewed to electronics deals (particularly flat-screen TVs and electronic picture frames) and low-margin door-busters (including promotionally-priced cashmere sweaters).”

As the holiday season progresses, given broader macroeconomic pressures are usurping consumers’ purse strings, Filandro says it’s no surprise that the average consumer plans on spending less this holiday selling season.

Susquehanna Financial Group conducted a survey of 2,000 U.S. consumers, focusing on shopping intentions for the 2007 holiday selling season. The group’s survey, which included 1,502 women and 498 men, aged 16 to 50, found that overall spending plans are lackluster, as 36% of respondents said they plan on spending somewhat to significantly less on holiday gifts this year.

Susquehanna found the major reasons for a weak spending outlook were additional expenses (60%), less salary (37%), more debt (36%) and less financial certainty (32%). Only 4% of respondents cited lower home values as a factor in their reduced spending plans, according to the survey.

Among the retailers Filandro maintains a “positive” rating on include, Build-A-Bear Workshop, Inc. (NYSE: BBW), The Children’s Place Retail Stores, Inc. (Nasdaq: PLCE) and Sharper Image Corp. (Nasdaq: SHRP).

“Given the positive move in retail stocks on Friday followed by bullish sentiment from mall developers and sales tracking services over the weekend, we think the trade is to sell the group into possible strength today,” wrote Slater.

The Russell 2000 (NYSE: IWM) futures are higher and the small-cap index will likely open in positive territory.

The earnings season continues to march on, with attention this morning focused on Motorola Inc. (NYSE: MOT). The Schaumburg, Ill.-based telecommunications giant reported a third-quarter profit, its first in 2007, and announced a better-than-expected outlook for the fourth quarter.

In other news, orders for durable goods, which are intended to last at least three years, fell 1.7% in September, according to the U.S. Commerce Department. Economists were expecting a rise of 1.5% following a revised decline of 5.3% in August.

Silver lining came in the form of a 0.4% increase in orders for non-defense capital goods excluding aircraft, after a rise of 1.8% in August. That measure is a key barometer of business spending.

At 10 a.m. ET, the U.S. Commerce Department will release the numbers on new homes sales in September. Economists are expecting to see a 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:

• Transcend Services Inc. (TRCR), up 17% on news of record third-quarter earnings.
• iRobot Corp. (IRBT), up 14% on news of a higher 2007 revenue outlook.
• ZOLL Medical Corp. (PLCE), up 12%.

Biggest percentage losers:

• Spartan Motors Inc. (SPAR), down 19% on news of a decline in third-quarter profit.
• Heelys Inc. (HLYS), down 11% on news of a lower third-quarter outlook.
• Triad Guaranty Inc. (TGIC) down 10% on news of a third-quarter loss.

The bears roared today as the Russell 2000 (NYSE: IWM) and the Dow Jones Industrial Average (INDU) lost ground due to renewed credit fears. The small-cap index dropped 11.80 points, or 1.40%, to 829.37. The Dow retreated 108.28 points, or 0.77%, to 13,984.80.

On a year-to-date basis, the Russell 2000 has increased 5.33%, while the Dow has added 12.11%.

Fears that this summer’s credit problems are still active spread throughout Wall Street today, leading to a steep sell-off.

It all started after Citigroup Inc. (NYSE: C) reported a 57% drop in its third-quarter profit. Net income at the New York-based bank, the largest in the U.S., was $2.38 billion, or $0.47 per share, compared with $5.51 billion, or $1.10 a share, during the same quarter a year earlier.

Citigroup blamed losses from subprime and leveraged loans, fixed-income trading and its U.S. consumer business for the decline in earnings.

Also dragging the financial sector down was news that Citigroup, Bank of America Corp. (NYSE: BAC) and JPMorgan Chase & Co. (NYSE: JPM) will be pooling money to prevent investment funds from having to dump assets into the market.

The pool will try to prop up about $400 billion of structured investment vehicles, which have had trouble refinancing their debt and may even have to sell off assets to pay back investors.

The bulls ran the show today as the Russell 2000 (NYSE: IWM) and the Dow Jones Industrial Average (INDU) posted solid gains on news of strong September U.S. retail sales. The small-cap index added 6.19 points, or 0.74%, to 841.17. The Dow advanced 77.96 points, or 0.56%, to 14,093.08.

The bears were hibernating today as investors reacted to news that retail sales for September increased 0.6% to $380.2 billion, according to the U.S. Census Bureau before the opening. That surprised economists, who were expecting a rise of 0.2%.

Retail sales excluding motor vehicles and parts also outpaced analysts’ projections, rising 0.4% instead of the expected 0.3%.

The numbers suggest that the American consumer remains resilient in the face of the ongoing housing slump.

However, Kurt Karl, head of Economic Research and Consulting for the North American operations of reinsurance company Swiss Re, cautioned against an overly optimistic interpretation of the data.

“Total retail sales were strong, but excluding autos, they were up 0.4—compensating for last month’s decline of 0.4%,” Karl said in an e-mail.  “Compared to a year ago, retail sales after-inflation are close to 2%, which is weak, but not disastrous.”

Karl explained that the weakness stems from stagnant sales of furniture and building materials, which have been affected by the problems in the housing sector.

In other economic news, a measure of consumer sentiment for October unexpectedly fell, indicating that consumers are cautious about their future spending.

Children's Place Retail Stores, Inc. (Nasdaq: PLCE) is putting itself up for sale, according to a Fortune magazine story reported after Thursday’s close. The news follows the recent firing of its CEO, resignation of its auditor and several shareholder lawsuits.

According to the story, The Secaucus, N.J.-based kids clothing retailer has hired investment bank Peter J. Solomon to advise the company on a sale. Prospective buyers include private equity groups and clothing companies, according to two anonymous individuals familiar with the company’s plans who are cited in the story.

In morning trading, PLCE shares are soaring 7.08%, or $1.55, at $24.30. Over the last 52 weeks, shares have ranged from $20.56 to $71.81.

The Russell 2000 (NYSE: IWM) futures are pointing up and the small-cap index will rise on news of strong September retail sales.

Retail sales for September increased 0.6%, the Commerce Department reported. That’s more than the projected 0.2% and a sign that the American consumer is alive and well. On Thursday retailers reported generally gloomy same-store sales for September.

Retail sales excluding motor vehicles and parts added 0.4%, outpacing analysts’ forecasts of 0.3%.
In other economic news, the U.S. Labor Department reported that producer prices for September increased 1.1%, the largest gain since February.

However, prices for goods excluding foods and energy, a key measure of core inflation, moved up just 0.1%. Core prices were projected to increase 0.2%.

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:

• Avigen Inc. (AVGN), up 12%.
• The Children's Place Retail Stores, Inc. (PLCE), up 11%.
• Verenium Corp. (VRNM), up 9%.

Biggest percentage losers:

• AgFeed Industries Inc. (FEED), down 13%.
• Thomas Group Inc. (TGIS), down 9%.
• Kosan Biosciences Inc. (KOSN), down 8%.

Children's Place Retail Stores, Inc. (Nasdaq: PLCE) announced before the opening that its auditor Deloitte & Touche will step down after finishing the clothing store retailer’s fiscal 2006 report. The Secaucus, N.J.-based company said it is in negotiations with another accounting firm and expects to announce a hiring soon.

Separately, Children’s Place announced that September sale-store sales fell 3%, which missed Wall Street expectations of a 1.1% decline.

In midday trading, PLCE shares are down 1.58%, or $0.37, at $23.03. Over the last 52 weeks, shares have ranged from $20.56 to $71.81.

Oxford Industries, Inc. (NYSE: OXM), Edge Petroleum Corp. (Nasdaq: EPEX) and Children's Place Retail Stores, Inc. (Nasdaq: PLCE) were among the new 52-week lows established Tuesday among companies with market capitalizations or values under $750 million.

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

Children's Place Retail Stores, Inc. (Nasdaq: PLCE), a specialty retailer of children's merchandise under The Children's Place and Disney Store brand names, said this morning that it expects a 60% decline in third-quarter earnings below its guidance on account of lower sales.

The news sent shares tumbling to a new 52-week low. Shares of The Children's Place were down 8.14%, or $1.98, to $22.24 at 11:25 a.m. ET. Shares of The Children's Place have been trading in the range of $23.86 to $71.81 for the past 52 weeks.

For the month of September, The Children’s Place comparable store sales decreased approximately 3% for the five weeks ended Oct. 6, 2007, compared with a 16% increase last year. As a result, the Secaucus, N.J.-based company said it now anticipates that third-quarter earnings per share will clock in at least 60% below the low end of its previous guidance range of $0.94 to $1.02.

The retailer noted that inventory levels were higher than expected due to lackluster sales. As a result, The Children’s Place said it took substantial unplanned markdowns during September, which produced lower-than-forecasted margins.

The company also said the expected decline is in part due to an estimated charge of approximately $0.07 per share for severance payments to be made to the company's former chief executive officer pursuant to the terms of his employment agreement with the company.

Guiding ahead, The Children’s Place said it expects such trends to continue through the remainder of the year. For the fourth quarter, the small-cap company said that if current sales and margin trends continue into the fourth quarter, the company's earnings per share will be significantly below the low end of its previous fourth quarter and full-year earnings per share guidance of $1.79 to $1.86 and $2.25 to $2.40, respectively. Eleven analysts polled by Thomson Financial were expecting earnings of $2.29 per share for the fiscal year.

Final September sales results will be reported on Oct. 11.