Tag - STSA

Small-cap stocks took it in the chin Wednesday, with retail stocks and financial shares falling out of favor with investors amid a gloomy economic environment and the ongoing credit crisis. The Russell 2000 (NYSE:IWM) lost 5.86, or 0.80%, to 730.71.

The S&P Retail Index crumbled nearly 2% to the second-lowest close since late March. Big-name department stores like Dillards (NYSE:DDS), JC Penney (NYSE:JCP), Nordstrom (NYSE:JWN), Kohls (NYSE:KSS), Macy’s (NYSE:M) and Sears (Nasdaq:SRLD) were all deep in the red

In the financial arena, the biggest percentage loser of the day was MF Global (NYSE:MF), the giant futures and commodities brokerage firm that was split off from Man Group last year. MF shares collapsed nearly 40%, shrinking its market cap down to about $945 million in the process. MF projected a significant decline in revenue and said it would raise $300 million to repay debt via $150 million in preference shares and another $150 million in convertible senior notes.

Although the steep freefall in MF shares was an attention grabber, the bears were active throughout the financial sector. In fact, late in the day seven of the top 10 percentage declines on the Nasdaq were either banks or financial firms. Tuesday’s slide in regional banks remained in play today, with Fifth Third Bancorp (Nasdaq:FITB) sinking nearly 20% after the firm said it would raise at least $2 billion in capital and slash dividends to help overcome credit losses.

The Dow slipped to the lowest daily close since mid-March, when the market was grappling with the collapse of Bear Stearns. For the recent move, the Dow peaked earlier than the Russell 2000, hitting a high on May 19 at 13,136. From the May 19 high to today’s low, the Dow is off 8.7%, while the Russell is only down 2.9% over that same time frame (although the Russell is off 4.8% from the early . . .

Small-cap stocks are expected to open slightly lower Tuesday, in line with mild declines in after-hours trading. The Russell 2000 (NYSE:IWM) was down about 0.3% overnight, which would translate to a cash opening near 716. Look for initial support for the Russell this morning at 714, then at 709 and 705. On the upside, resistance remains near 724, then at 731.

The market’s pullback Tuesday was confined to an inside session move, and was consistent with a mild overbought correction. As long as the market doesn’t sink through 709, it won’t endanger the advance from late last week.

Stock indices around the world were narrowly mixed overnight, with Japan’s Nikkei down 1%, Hong Kong’s Hang Seng up 0.8% and Europe markets slightly mixed depending on the nation. The U.S. dollar was flat to soft overnight, crude oil remained bid amid strife in producing country Nigeria, a refinery strike in Scotland . . .

The Russell 2000 recaptured some of the previous day’s losses Thursday, rising 9.05, or 1.30% to 707.42. The index left a little double bottom on daily charts near the low, and that area around 696 stands as immediate support today. Below there, look for support at 688 and 681. Resistance should be seen at 714, 720.50 and 725.

Today’s session features minimal event risk. The 10:00 a.m. ET sentiment figures from the University of Michigan sometimes spark a short-term twitch from traders, but represent a minor report overall.

Sterling Financial Corp. (Nasdaq: STSA) said it is tempering its fourth-quarter earnings outlook on account of charges for credit costs and prepayment for high fixed rate trust preferred securities.

For the fourth quarter ending Dec. 31, the Spokane, Wash.-based small cap said it now expects earnings in the range of $0.31 to $0.34 per diluted share. The consensus of five analysts polled by Thomson Financial was for earnings of $0.53 per share. Sterling earned $0.57 in the fourth quarter last year.

For the year ended Dec. 31, 2007, Sterling said it now expects earnings to be in the range of $1.84 to $1.87 per diluted share. Four analysts polled by Thomson Financial were on average projecting earnings of $2.09 per share for the full year. Last year the bank earned $2.02 per share.

Sterling said it is continuing to closely monitor its loan portfolio and focus on residential construction lending. The company said it is taking a “measured approach” to provide adequate loan loss provisions, and as a result, Sterling said it expects to record an approximate $13 million provision for credit costs for the fourth quarter.

Shares of North Valley Bancorp (Nasdaq: NOVB) are falling following news before the start of trading that the bank holding company has decided to cancel its merger with Sterling Financial Corp. (Nasdaq: STSA).

Redding, Calif.-based North Valley Bancorp announced that it has been advised by Sterling Financial that the regulatory approvals required to finalize the merger on or before Nov. 30 have not yet been obtained. In response, North Valley, the holding company for North Valley Bank, said that it decided on Dec. 1 to cancel the merger.

On April 10, Sterling, which operates through its subsidiaries Sterling Savings Bank and Golf Savings Bank, bought North Valley for about $196 million in cash and stock. The definitive agreement stipulated that either bank cancel the deal if it was not completed by Nov. 30.

North Valley Bank has 26 banking offices in northern California.

At 3:53 p.m. ET, shares of North Valley Bancorp (NOVB) had let go $1.07, or 7%, to $13.53. That’s near the 52-week low of $13.50, set on Nov. 21. The 52-week high of $26 was reached on March 14.