Tag - USS

Small-cap shares are edging higher in midday trading, supported by a reversal rally that was triggered ahead of the opening by an inflation report suggesting that the economic slowdown is moderating inflation related to soaring food and energy prices. At 1:20 p.m. ET, the Russell 2000 (NYSE:IWM) was up 6.71, or 0.91%, at 743.56.

The consumer price index (CPI) headline figure came in at 0.2%, which was below the forecasted 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 out of control, which means the Federal Reserve can keep interest rates low in response to the sputtering economy.

“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 . . .

Small-cap stocks are treading shallowly in the red midday, while the other major indices remain deeper in the red after Fed Chairman Bernanke said that markets are “far from normal,” oil prices hit record levels, major brokerage houses on the Street were downgraded and housing prices saw the steepest decline in 26 years.
 
At 1:19 p.m. ET, the Russell 2000 (NYSE:IWM) edged down 1.45, or 0.2%, at 731.78, while the Dow had skidded 84.27, 0.65%, at 12,792.04.

Federal Reserve Chairman Ben Bernanke spoke earlier this morning about liquidity issues in the financial markets. He said that the liquidity measures taken by the Fed to ease the credit crisis have helped, but that the markets are still “far from normal.” Also slated to speak this afternoon on the state of the economy are Federal Reserve San Francisco President Janet Yellen, Kansas City Fed President Thomas Hoenig and Dallas Fed President Richard Fisher.

“I believe that the current credit problems will take some time to resolve. Therefore, monetary policy will remain loose for much longer than many are anticipating,” said Doug Roberts, chief investment strategist for ChannelCapitalResearch.com, an independent research firm focusing on investment strategies using the Federal Reserve's impact on the stock prices. “You still have negative interest rates. Eventually as fear abates and as oil prices stabilize, small caps are going to start to rally because of the liquidity infused into the system. You’re even starting to see small caps at least in parity with large caps this year.”

Today’s pullback comes on the heels of Monday’s robust 1% advance. Oil reversed course nearing $127 a barrel intra-session on concerns that Iran may cut crude oil production. Gold slumped $16.60 per ounce to $868, as the greenback gained ground against the euro and the yen.

In other bleak economic news, the National Association of Realtors reported this morning that single-family home prices declined 7.7% in the first quarter, . . .

The Russell 2000 (NYSE: IWM) and the Dow fell today on news of rising mortgage defaults and credit market losses. The small-cap index dropped 19.96 points, or 2.64%, to 735.07. The Dow Jones Industrial Average (INDU) let go 237.44 points, or 1.83%, to 12,743.44.

On a year-to-date basis, the Russell 2000 has shed 6.65%, while the Dow has added 2.16% and the S&P 500 is down 0.66%.

Stocks posted big losses today following news that HSBC Holdings PLC (NYSE: HBC) could face billions in losses and Citigroup Inc. (NYSE: C) is planning job cuts in a move to return to profitability.

London-based HSBC may have to absorb losses of up to $12 billion due to bets placed on securities backed by subprime mortgages, according to an analyst from Goldman Sachs Group, Inc. (NYSE: GS). HSBC, which is Europe’s largest bank, may also need to rescue two of its funds by putting $45 billion of their assets onto its balance sheet.

More bad news came from Citigroup, which announced that it is looking for ways to improve efficiency and cut costs in order to return to profitability after mortgage writedowns led it to report a loss in its most recent quarter

Although Citigroup, the largest U.S. bank, did not say how many of its over 300,000 employees will be getting pink slips, a news report from business news channel CNBC put the figure at between 17,000 and 45,000.

The fact that two of the world’s largest banks are in the crosshairs of the fallout from the subprime mortgage meltdown scared investors and put stocks on the downward trajectory.

The Russell 2000 opened in positive territory but reversed course within an hour after the start of trading, while the Dow stayed on both sides of the flat line until about 1 p.m. ET, when the bears established their dominance.

The Russell 2000 (NYSE: IWM) and the other major U.S. indices are in negative territory due to more credit concerns. At 2:37 p.m. ET, the small-cap index had lost 9.27 points, or 1.23%, to 745.76. The Dow Jones Industrial Average (INDU) was missing 50.81 points, or 0.39%, to 12,930.07.

The bears have returned to action this afternoon following news that HSBC Holdings PLC (NYSE: HBC), Europe’s largest bank, may need to rescue two of its funds by putting $45 billion of their assets onto its balance sheet.

Additionally, the London-based financial services giant may face losses of up to $12 billion due to bets placed on securities backed by subprime mortgages, according to an analyst from Goldman Sachs Group, Inc. (NYSE: GS).

The news once again demonstrates that losses associated with the meltdown in the subprime mortgage sector continue to plague the financial system. Many financial institutions have had to deal with tighter liquidity and have responded by tightening credit. A number of U.S. mortgage lenders have even gone bankrupt.

Contributing to the credit jitters is Citigroup Inc. (NYSE: C), which announced today that it is looking for ways to improve efficiency and cut costs after mortgage writedowns led it to report a loss in its most recent quarter. News reports claim the New York-based bank could cut anywhere between 17,000 and 45,000 jobs in an effort to return to profitability.

Elsewhere, the price of oil has eased $0.72 to $97.46.

Hoku Scientific, Inc. (Nasdaq: HOKU), SRI/Surgical Express, Inc. (Nasdaq: STRC) and U.S. Shipping Partners L.P. (NYSE: USS) are among the biggest percentage gainers in Monday's trading among companies with market capitalizations under $750 million.

Here are today's biggest percentage gainers:

U.S. Shipping Partners L.P. (NYSE: USS) shares are up after the provider of long-haul marine transportation services announced that it expects to pay a $0.45 dividend for each common share at the end of the fourth quarter.

The Edison, N.J.-based firm said the expected utilization rate of its ships and current market conditions will provide the company with enough liquidity to pay the minimum quarterly dividend on its common shares during 2008. U.S. Shipping Partners operates ships that haul petroleum products to oil refiners and chemical producers.

In morning trading, USS shares are up 24.22%, or $2.33, at $11.95. Over the last 52 weeks, shares have ranged from $8 to $22.45.

The Russell 2000 (NYSE: IWM) opened with modest gains but later slipped into negative territory despite news of a successful Black Friday.

At 10:32 a.m. ET, the small-cap index had retreated 2.37 points, or 0.31%, to 752.66. The Dow Jones Industrial Average (INDU) was up 23.49 points, or 0.18%, to 13,004.37.

Separate news reports indicate that U.S. retailers had a successful Black Friday, a bullish sign for many investors. The day after Thanksgiving is referred to as Black Friday because it’s considered the day when retailers become profitable for the year.

Preliminary numbers show that sales rose 8.3% to $10.3 billion, according to ShopperTrak, a provider of shopper traffic counting information software.

“We anticipated that the 2007 trend would continue and consumers would be willing to spend despite all of the economic pressures we’ve been hearing about heading into the season,” said Bill Martin, co-founder of ShopperTrak, in a statement.

Meanwhile, the National Retail Federation announced that 147 million shoppers hit the stores over the Black Friday weekend, an increase of 4.8% from a year earlier.

However, spending per customer decreased 3.5% to $347.44.

The statistics tell us that retailers increased traffic by luring consumers with promotions and discounts, but the slump in the U.S. housing sector, high energy prices and a credit squeeze took their toll on individual spending.