Tag - Abk

Stocks are down as of press time, 12:00 P.M. Eastern. The Dow is down 17.08 points at 9,263.89; the Nasdaq is at 1,979.74 and quickly retreating from it's Tuesday closing high of 2,009.40; and the S&P 500 is down below 998.82.  

Most active small-cap decliners in the morning session include Orthovita (Nasdaq:VITA) down 29%; Health Fitness Corporation (AMEX:FIT) down 26%; and Sunrise Senior Living (NYSE:SRZ) down 23%. 

Small-caps bucking the trend and actively rising include a former SmallCapInvestor.com PRO holding, SXC Health Solutions (Nasdaq:SXCI) up 28% on reporting Q2 2009 EPS numbers 41% higher than the year ago period and raising guidance for 2009 with an EPS of $1.70, up from $1.62.  

Other small-cap gainers in the morning session include Home Inns & Hotels Management (Nasdaq:HMIN) up 25% and Ambac Financial Group (NYSE:ABK).

*****Yesterday, the Challenger jobs report showed more jobs were lost in July than expected. It wasn't a big miss, but it was a miss. And after buyers stepped in early, the market's reaction wasn't a big one, either. By the end of the day, the Dow Industrials lost 30-some points.  

I've been pointing out how the market just doesn't seem to have much downside. Yesterday's job loss news wasn't a disaster, but it wasn't good. But investors stepped in and pushed stocks well off their lows.  

The Fed has made money cheap, and it's going into the stock market. There's been a lot of talk that there's a stock market bubble in China because investors there are putting money from government stimulus efforts into the stock market. Nobody's saying that about the U.S. stock market, but that is what's happening. 

This is the "false trend" I was referring to with the George Soros quote from the other day. We should understand that this trend will most likely be proved false at some point. The question is, when? 

*****Today, jobless claims came in lower than expected. That's going to put stocks on better footing. Of course, continuing claims rose. But investors are having the sense that the U.S. economy is stabilizing, so they are buying stocks.   

In my Recovery Portfolio, I'm about to lock in a virtually risk-free 14% gain on drug maker Wyeth (NYSE:WYE). Pfizer (NYSE:PFE) announced that it would acquire Wyeth on January 6 in cash and stock deal. I bought Wyeth when Pfizer stock was low. My purchase price was essentially locked in by the acquisition terms. There was nothing but upside. And as Pfizer has recovered along with the market, my investment in Wyeth has done well.  

If you'd like to learn about the "aggressive approach to conservative investing" that's driving my Recovery Portfolio, please click here. 

*****Cisco (Nasdaq:CSCO) CEO John Chambers is one of the best CEOs there are. He's a straight-shooter, telling investors "…not to get too far ahead of themselves…" concerning Cisco's earnings report and forecast.  

In a nutshell, the last quarter was pretty good for Cisco, but the company still faces challenges. His advice is valid for all investors. Just check the retail sales data out this morning. The economy may be stabilizing, but retail is experiencing challenges. Sales were down around 5% across the board. And that trend has been in place for months.  

Let's not get too far ahead of ourselves.  

******Treasury Secretary Timothy Geithner claims the government made a 23% profit on its bailout of Goldman Sachs (NYSE:GS). Now, Morgan Stanley is about to buy back a warrant it sold the government for $950 million.  

There's no word what the government's profit is on this, but there should be no doubt that there is one. And that's how it should be, so far as I'm concerned.  

If these banks need money, the government shouldn't be a lender of last resort. It's an investor, and should be rewarded. And don't forget, favorable government policies are allowing banks to profit. So again, the government should be rewarded for the risk it takes.  

*****Yesterday, my first monthly column appeared in The Burlington Free Press, the daily newspaper in the state of Vermont. The first column is Investing in Vermont: Profits await clean energy investors. In this column I discuss investing in the clean energy sector, and offer readers three ideas - including two mutual funds and one ETF. You can read the column by clicking here.  

*****The Managed America web video conference is coming up next Monday, August 10 at 6:00 P.M. It's free to attend and you can register right now. Click here to register for this free online event.  

Ian Wyatt

Editor

Daily Profit 

P.S. Don't forget that with tomorrow's edition we'll once again bring back Jason Cimpl, lead technical analyst from TradeMaster Daily Stock Alerts to give you his assessment on the market and his call for next week's trades. You can catch a replay of last Friday's video: click here.

Small-cap stocks extended the bear market collapse Thursday, tumbling to the lowest point since May 2003 as a familiar combination of awful economic data and flight-to-quality money flow was accentuated by a rout in energy stocks. The market generated an impressive midday recovery to positive territory on oversold conditions and erratic bargain hunting but failed to sustain the move. Some of today’s small-cap gainers are Ambac (NYSE:ABK), Doral Financial Corp. (NYSE:DRL) and China Distance Learning (NYSE:DL).

Other Market Watch highlights today included:

• The Energy Select Sector SPDR Fund tumbled some 10% today as energy names were a big drag on index products big and small.  
• Crude oil prices tumbled some 8% to three-year lows as fears of sinking global demand continues to hammer energy prices.  
• The market will get a break from any major economic reports Friday, allowing other factors to compete for investor attention.  
• Benchmark 10-year notes saw yields down more than 6%, an astounding move as investors appeared to pour cash into Treasuries.  


Small Cap Gainers:

• Ambac commutes $3.5 billion in CDO exposure; shares skyrocket 80%. See (SEE:ABK).
• Doral Financial Corp. is up 34% after narrowing its Q3 losses by 97%. See (NYSE:DRL).  
• China Distance Learning sees a decline in net profits but a rise in net revenue. Shares are up over 13%. See (NYSE:DL).  
• Aircastle Limited up 12% after kissing a 52-week low of $2.78 this morning, down from a 52-week high of $28.02. See (NYSE:AYR).  

Small Cap Losers:

• Media General shares lost as much as 54% of their value on Thursday after Harbinger Capital sold stock in the newspaper publisher. See (NYSE:MEG).  
• Arbor Realty Trust hit a new 52-week low of $1.90, down from a 52-week high of $19.20. Shares are currently down 31%. See (NYSE:ABR).
• Helix Energy Solutions Group Inc. closed down 44% as the offshore development company said that production in the wake of Gulf hurricanes was near 50% of pre-storm levels. See (NYSE:HLX).  
• Sandridge Energy Inc. tumbled 42% as the natural gas company set record lows for their stock. See (NYSE:SD).  

Small-cap stocks pushed lower on the open as sloppy profit numbers and weak economic data returned to center stage now that the U.S. presidential election has been decided following last night’s historic runaway victory by Barack Obama. Today's small-cap gainers were EnerNOC Inc. (Nasdaq:ENOC), Silver Wheaton (NYSE: SLW) and Dollar Thrifty Auto (NYSE:DTG).

Other Market Watch highlights included:

• Crude oil prices pushed lower into the stock market open, staging a moderate pullback after Tuesday’s big rally and before inventory data comes out later this morning.  
• BMO's Andrew Busch: A stimulus package of $150B will likely be enacted, with checks mailed out by March.  
• From a strict company perspective, there is a broad sense that an Obama presidency would be positive for solar and wind companies.  
• Today Treasury said it will resurrect 3-year note, do more auctions of 10-year notes & 30-year bonds to fund the gvnt.’s borrowing needs.  
• There was another big pullback in Libor rates overnight, which should help encourage inter-bank lending and help thaw out the credit market freeze. 

Small Cap Gainers:

• EnerNOC Inc. rallied 25% today, riding a boost in the energy sector. See (Nasdaq:ENOC).  
• Silver Wheaton up 18% after it prioritizes debt reduction, remains bullish on silver. See (NYSE:SLW).
• Dollar Thrifty Auto jumping 18% in pre-market on better-than-expected earnings. See (NYSE:DTG).  
• Clinical research organization Kendle International reports record Q3 08 net income; shares up 12.46% in pre-market. See (Nasdaq:KNDL).  

Small Cap Losers:

• Clean Energy Fuels Corp. gapped lower and was down 17%, giving back most of the sizable previous three-day rally. See (Nasdaq:CLNE).  
• Stone Energy Corp. tumbled 20% tied to earnings news. See (NYSE:SGY).  
• i2 Technologies down 27% after JDA Software Group requested an adjournment of ITWO’s shareholder meeting to negotiate a reduced purchase price for the firm. See (Nasdaq:ITWO).  
• Ambac Financial Group Inc. is tumbling 26% as quarterly losses were much bigger than expected. See (NYSE:ABK).  

Small-cap stocks pushed lower on the open as sloppy profit numbers and weak economic data returned to center stage now that the U.S. presidential election has been decided following last night’s historic runaway victory by Barack Obama. At 10:05 a.m. ET, the Russell 2000 (NYSE:IWM) was down 7.05, or 1.29%, at 538.90.

The ISM Non-Manufacturing Survey came in at 44.4, which was well below the forecast of 48.0 and was at the lowest point in the 10-year history of the survey. Interestingly, stocks actually trimmed losses after the glum report, but remained in negative territory.

Earlier this morning, the ADP Employment Survey was reported at minus 157,000, well below the forecast for a 100,000 loss. Even though the ADP report has not been tracking very well with the Labor Department survey, today’s ADP data cast a pall on the market heading toward Friday’s big monthly employment report. In addition, the MBA Mortgage Applications Index tumbled 20.3% last week to the lowest point since December 2000 in response to a jump in fixed mortgage rates, and purchase activity slipped by 13.9% and is also at the lowest level since December 2000.

There was another big pullback in Libor rates overnight, which should help encourage inter-bank lending and help thaw out the credit market freeze. Supply remains an issue in credit markets and today the Treasury said it will resurrect the 3-year note and conduct more frequent auctions of 10-year notes and 30-year bonds to fund the government’s staggering borrowing needs.

The market was now buzzing over what impact President-elect Obama will have on difficult pressing issues about the economy, jobs erosion, the housing meltdown, the financial crisis and the wars in Iraq and Afghanistan. While it appears a daunting task, Obama will enter the job with a mandate for change from the people and a big majority in the House and Senate to further his plans. From a historical perspective, it’s interesting to note that the stock market has lost about 1% in the first month after electing a new Democrat changeover to the White House, but then the market has rallied 10% over a 12-month period after the election. From a strict company perspective, there is a broad sense that an Obama presidency would be positive for solar and wind companies and potentially negative for defense contractors and big oil companies.

Strategists with BMO Financial Group said in a press release that Obama’s . . .

Small-cap stocks are expected to open lower, pulled down by sloppy earnings news in the United States and Europe and a weak reading on the ADP jobs report, which could refocus market attention on the economy following a historic runaway victory by Barack Obama in the presidential vote. Stock index futures were down about 1.5% in after-hours trading, which suggests the Russell 2000 (NYSE:IWM) will open near 537.50.

The ADP Employment Survey came in at minus 157,000, which was worse than the forecast for a decline of 100,000. Although the ADP report has not been tracking well with the big Labor Department report that will come out Friday morning, it still throws up a caution flag.

Some of the pullback might also have been tied to concerns that Democrats picked up several new seats in the Senate and Congress during the U.S. elections, giving one party a commanding majority, whereas the market seems to favor more balance of power. In addition, there was some sense that the market has been grinding higher on nothing but air amid awful economic data in recent days, which is a tenuous position heading toward Friday’s big monthly employment report.

On the earnings front, Time Warner Inc. (NYSE:TWX) slipped about 2% during European trading despite beating the profit forecast as the world’s largest entertainment firm lowered the outlook. Also, Ambac Financial Group Inc. (NYSE:ABK) tumbled some 23% in pre-market trading as quarterly losses were much bigger than expected.

The chart picture shows some stalling signals on short-term studies as the market has filled upside targets on a symmetrical bounce and ran into logical resistance . . .

Small-cap stocks slipped 1.89% late Friday, as a bleak report on the housing sector, options expiration volatility and ongoing worries about the economy offset a spate of positive earnings in the tech arena. Today’s small-cap gainers are CIT Group (NYSE:CIT), Universal Stainless & Alloy Products (Nasdaq:USAP) and Ambac Financial Group (NYSE:ABK). Other Market Watch highlights today included:

• BMO Capital's Andy Busch to SCI: "There is a serious need to educate the banking sector participants on the changes in the Treasury programs the Fed programs directed at easing the credit crunch." 
• Outside of the gold market, commodity stocks were doing well today, with coal, steel, gas utilities, oil exploration, gas storage and agriculture products all up. 
• On the downside, anything tied to housing was struggling, including home furnishing stocks and homebuilder shares. Bank stocks and financial shares were also lagging the general market. 
• The expiration of options on stocks today likely played a role in some of the market’s struggles as the directional bias into expiration is clearly toward lower prices. 
• Crude oil jumped some $4 a barrel today as the market anticipates . . .

After spiking into the green out of the gate, small caps have since plunged and are flickering in and out of the green and red midday after waning global economic growth weighed on oil, pushing the dollar and larger-cap equities higher.

At 12:30 p.m. ET, the Russell 2000 (NYSE:IWM) slipped 3.46, or 0.46%, to 750.91, while the Dow had gained 18.73, or 0.16, to 11634.66.

Crude has touched a low on today’s session, selling off $3 a barrel to roughly $111 midday and posting a three month low, after OPEC forecasted that global demand for energy continue to falter.

Higher oil prices have pushed input costs for all companies higher and have weighed on operations. A decline in global growth would mean a reduced thirst for oil, which would push down the escalating raw material costs for most firms. However, that slower growth means less demand for final products. So it’s a double edged sword keeping equities in check.

“The global economic race to the bottom appears to be over as the U.S. has hit bottom and the rest of the world is still falling,” Andy Busch wrote in an email today.

The potential slowing global growth’s effect on oil sent the dollar surging to $1.4686 against the euro and 110.47 against the yen midday. The surge in the dollar as of late all started with the European Central Bank’s dovish comments last Thursday followed by reported negative GDP growth in the euro zone.

Small-cap stocks took flight Thursday, soaring in response to strong chain store sales, and a bullish surprise on weekly unemployment claims. The Russell 2000 (NYSE:IWM) shot up 19.55, or 2.63%, to 763.26, the highest daily close of the year.

In the process, the Russell stormed through key long-term resistance at 750, a point that had been difficult to tackle in recent weeks. That area represented a 50% Fibonacci retracement of the entire bear market collapse, and sets the stage for a rally toward the final key retracement of 61.8%, which is near 775. The market could pause near 760, which is a logical chart-related resistance area on the way toward 775. A weekly close above 750 after jobs Friday would be an important benchmark within the ongoing rally off the March lows.

The strong performance was impressive in front of Friday’s employment report, which suggests that shorts were no longer willing to risk losing trades in front of the big release, and that new longs were comfortable taking on positions ahead of the jobs event.

The catalyst for today’s rally appeared to center on surprisingly stout monthly chain-store sales results. Apparently gasoline pump prices near $4 dollars a gallon didn’t stop consumers from heading out to the store to unload some of their tax rebate money from Uncle Sam. With the U.S. economy heavily dependent on spending for momentum, a show of strength from retailers is a welcome sign to the market.

Among retailers, discounters like Costco (Nasdaq:COST) and Wal-Mart (NYSE:WMT) had particularly impressive results, with Costco comp sales up 9% in May and Wal-Mart up 3.9%. Wal-Mart’s stock embraced the news, surging 3.5% to four-year highs. Costco was up 3.4%. And it wasn’t just a large-cap story on the retailer front. Small-caps Hot Topic Inc. (Nasdaq:HOTT) jumped some 16% as sales at the pop culture apparel and accessories store came in much better than feared. Also, Cache Inc. (Nasdaq:CACH) rose about 14% as sales at the specialty women’s apparel store . . .

Small caps are rising in Wednesday’s afternoon trading, after three consecutive losing sessions. Promising economic data assuaged investors’ concerns about the financial sector after Moody’s Investors Service warned that it might lower the credit ratings of bond insurers Ambac Financial Group (NYSE:ABK) and MBIA Inc. (NYSE:MBI). At 2:13 p.m. ET, the Russell 2000 (NYSE:IWM) was up 6.37, or 0.86%, at 745.37.

The ADP private employment survey today showed a better-than-expected gain of 40,000 jobs in May. Nonfarm payrolls also jumped 60,000 in May. On Friday, the Labor Department reports its data on U.S. nonfarm payrolls for May.

Lower crude oil prices are easing inflation concerns. In afternoon trading, crude oil is down to $122.66 a barrel. Gold futures are also down in Wednesday afternoon action.

Lehman Bros. (NYSE:LEH) shares are dipping after the Wall Street Journal reported that the brokerage firm might need capital from foreign investors to strengthen its balance sheet. Further concerns about the financial sector were raised when ratings agency Fitch said overnight that a couple of large French banks needed to raise capital.

Moody’s Investors Service said Wednesday afternoon that MBIA Inc. has weak new business prospects and may incur higher losses on guarantees it sold on mortgage-backed securities and collateralized debt obligations. Moody’s put MBIA on review for a possible downgrade.

Broad market sectors under pressure include coal energy, home improvement retailers, oil and gas, metal mining, aerospace and defense companies. On the upside, airline, printing services, plastics and rubber, auto and truck manufacturers, school . . .

Stocks managed to eek out gains for the first day after two straight sessions of red, as investors shrugged off Ambac Financial Group Inc.'s (NYSE:ABK) lackluster outlook and embraced better-than-expected results from a range of technology companies.

The Russell 2000 (NYSE:IWM) ended the day up 4.40 points, or 0.66%, to a level of 708.11, while the Dow gained 42.99 points, or 0.34%, to a level of 12763.22.

Trading was choppy for the day as investors digested a slew of earnings news from technology, industrial, tobacco, banks and commodity producers.

A large percentage advance was registered early today in Sirtris Pharmaceuticals (Nasdaq:SIRT), with the stock up a whopping 82% on news that GlaxoSmithKline (NYSE:GSK) would buy the company for $720 million . . .

Small-cap stocks are expected to open lower, in line with a 0.3% decline in after-hours trading on the Russell 2000 (NYSE:IWM) that would translate to an opening near 701.50 in the cash index.

Although Asian stocks were higher overnight, European equities turned down slightly ahead of the U.S. opening, which tugged stock index futures into the red. Bank stocks in Europe remain a bearish target amid massive debt write-downs and efforts to raise capital. Within the financial arena, bond insurer Ambac Financial Group (NYSE:ABK) took a 5% hit overnight on soft earnings, which helped counter positive news from Broadcom Corp. (Nasdaq:BRCM) after they handily beat the earnings forecast. Upbeat profits from search giant Yahoo! Inc. (Nasdaq:YHOO) were seen as not enough to bolster a takeover bid from Microsoft Corp. (Nasdaq:MSFT), and therefore did not ignite a bullish response in overnight trade.

Traders will continue to keep an eye on the U.S. dollar today after the Dollar Index tumbled to one-month lows yesterday and cash euro/dollar values hit record highs. In addition, crude oil is on the radar screen after hitting record highs yesterday and prompting an 11% collapse in the Amex Airline Index, bringing it to record . . .

The Russell 2000 (NYSE: IWM) snapped a five-session losing streak on generally bullish economic news and plans to help a bond insurer. The small-cap index added 2.76 points, or 0.41%, to 683.74. The Dow Jones Industrial Average (INDU) gained 41.19 points, or 0.34%, to 12,254.99.

On a year-to-date basis, the Russell 2000 is down 10.74%, while the Dow is missing 7.61% and the S&P 500 has lost 9.17%.

A volatile day of trading began on a bullish note following news that business productivity growth for the fourth quarter of 2007 was revised up to an annualized rate of 1.9%, according to the U.S. Commerce Department before the opening.

Economists were expecting productivity to stay at its initially reported rate of 1.8%.

Contributing to the upbeat mood was a report after the start of trading from the Institute of Supply Management that non-manufacturing activity increased to a reading of 49.3% in February from 44.6% in January. That still indicates a contraction in the sector that provides about 80% of U.S. gross domestic product, but economists had projected worse.

The Russell 2000 (NYSE: IWM) and the Dow have trimmed their earlier gains and are moving erratically on news that a major bond insurer is raising capital. At 2:54 p.m. ET, the small-cap index was up 2.81 points, or 0.41%, to 683.79. The Dow Jones Industrial Average (INDU) was up 13.19 points, or 0.11%, to 12,226.99.

Stocks small and large dropped steeply into the red at about 1:30 p.m. ET, following news that bond insurer Ambac Financial Group, Inc. (NYSE: ABK) is planning on raising $1.5 billion in capital in order to keep its triple A rating. The Russell 2000 rebounded at about 2:45 p.m. ET.

The New York-based company, which is suffering the consequences of having guaranteed subprime-related debt, has been trying for months to raise money in order to maintain its rating. A downgrade will create problems for banks that hold over $500 billion in bonds insured by Ambac as some investors sell the debt while others reduce their holdings.

The bulls dominated the first half of the session on news that fourth-quarter productivity was revised up while the U.S. services sector contracted less than expected in February.

The Russell 2000 (NYSE: IWM) posted a large gain and outpaced the other major U.S. indices on good news from bond insurers. The small-cap index added 15.03 points, or 2.16%, to 710.46. The Dow Jones Industrial Average (INDU) climbed 189.20 points, or 1.53%, to 12,570.22.

On a year-to-date basis, the Russell 2000 has retreated 7.25%, while the Dow is down 5.24% and the S&P 500 has declined 6.58%.

Stocks ended the session with a surge on news that rating agency Standard & Poor’s reaffirmed the Triple A rating of bond insurers MBIA Inc. (NYSE: MBIA) and Ambac Financial Group, Inc. (NYSE: ABK).

The past couple of weeks had seen speculation that the companies will be downgraded, a move that will create problems for banks that have invested in bonds and probably lead to more losses due to writedowns on subprime mortgages.

Separately, several banks are planning a $3 bailout of Ambac Financial Group.

The two bond insurers had insured subprime-mortgage debt and are suffering the consequences of the ongoing stagnation in the U.S. housing sector.

Speaking of housing, the National Association of Realtors reported after the start of trading that sales fell 0.4% to an annualized rate of 4.89 million units, down from an upwardly revised 4.91 million units in December.

Investors actually took that as bullish news because economists were expecting to see a fall to an annual rate of 4.80 million units.

The Russell 2000 (NYSE: IWM) is posting big gains on news that a major bond insurer will maintain its rating. At 3:23 p.m. ET, the small-cap index was up10.61 points, or 1.53%, to 706.04. The Dow Jones Industrial Average (INDU) had advanced 132.61 points, or 1.07%, to 12,513.63.

Stocks small and large rose sharply shortly after 2 p.m. ET on news that rating agency Standard & Poor’s will maintain its triple-A rating on bond insurer MBIA Inc. (NYSE: MBIA).

The past couple of weeks had seen speculation that the Armonk, N.Y.-based company will be downgraded, a move that will create problems for banks that hold bonds insured by MBIA and probably lead to additional writedowns.

There were reports earlier today that several banks will put together a $3 billion bailout plan for rival bond insurer Ambac Financial Group, Inc. (NYSE: ABK), also with the intent of preventing a damaging downgrade.

Bond insurers made a mistake when they decided to insure subprime-mortgage debt.

Small-caps are up but shares of DivX, Inc. (Nasdaq: DIVX) are falling on news that the maker of video compression software will shut down one of its websites.

Similarly, Aliso Viejo, Calif.-based Smith Micro Software, Inc. (Nasdaq: SMSI) is seeing its stock decline in news the developer of wireless communications software products got downgraded by an analyst.

Elsewhere, shares of Shiloh Industries, Inc. (Nasdaq: SHLO) are flat on news the manufacturer of engineered products plans on sticking to its current business model in 2008.

“Moving forward, we continue to maintain our focus on cash flow optimization, capital asset utilization and debt reduction while we pursue opportunities for profitable growth,” CEO Theodore Zampeti said in a conference call.

The Russell 2000 (NYSE: IWM) is rising despite news of another decline in home sales.

At 10:18 a.m. ET, the small-cap index was up 5.73 points, or 0.82%, to 701.16. The Dow Jones Industrial Average (INDU) had advanced 41.92 points, or 0.34%, to 12,422.92.

Small-cap stocks briefly opened positive on speculation that several banks will announce a $3 billion bailout plan for bond insurer Ambac Financial Group, Inc. (NYSE: ABK) so that the New York-based company will be able to keep its credit rating.

But the initial rise was short-lived and within minutes the Russell 2000 was in the red. The index rebounded shortly after 10 a.m. ET following news that existing U.S. home sales fell 0.4% in January to an annualized rate of 4.89 million units.

That’s the sixth consecutive monthly drop. December’s pace was an upwardly revised 4.91 million units.

Shares of DTS, Inc. (Nasdaq: DTSI) are higher following news that the Agoura Hills, Calif.-based provider of entertainment technology was upgraded by an analyst.

On the flip side, wireless communications software products and services provider Smith Micro Software, Inc. (Nasdaq: SMSI) had its target price reduced to $11 from $20.

Meanwhile, Agria Corp. (NYSE: GRO), which produces and sells agricultural products, said before the start of trading that it expects revenues for the fourth quarter of 2007 to reach be at the high-end of prior guidance. The Chinese company had previously announced that it expects revenues between $31.8 million and $33.8 million.

The Russell 2000 (NYSE: IWM) futures are up slightly and the small-cap index is set to open higher.

The mood on Wall Street is cautiously bullish following speculation that several banks will announce a $3 billion bailout plan for bond insurer Ambac Financial Group, Inc. (NYSE: ABK) so that the New York-based company will be able to keep its credit rating.

The Russell 2000 continued a pattern of wicked intraday volatility on Friday, rejecting a morning slump to fresh move lows to close in the upper portion of the range, forming a little bullish pattern on short-term charts. The Index closed at 695.43, down only 0.85 for the day, after enduring double-digit declines for much of the session.

Monday’s 10:00 a.m. ET existing home sales report could spark a little morning volatility, but is just the first of a smorgasbord of economic releases to come this week. Resistance Monday is just overhead at our swing line at 700, then at 704, 712 and 721. Meanwhile, support is at 688, 681 and 675.

The Russell 2000 (NYSE: IWM) closed in the red while the other major U.S. indices rose on news of a plan to help bond insurers. The small-cap index fell 0.85 points, or 0.12%, to 695.43. The Dow Jones Industrial Average (INDU) gained 96.72 points, or 0.79%, to 12,381.02.

On a year-to-date basis, the Russell 2000 has declined 9.22%, while the Dow is down 6.66% and the S&P 500 has retreated 7.85%.

Bond insurers were the story today, first causing steep declines and then becoming the catalyst of a breathtaking rebound that lifted all but the small-cap index.

Stocks small and large spent the majority of the session deep in negative territory on speculation that rating agencies Moody’s, Standard & Poor’s and Fitch will move to downgrade major bond insurers MBIA Inc. (NYSE: MBI) and Ambac Financial Group, Inc. (NYSE: ABK).

The Russell 2000 (NYSE: IWM) has extended its decline and remains the worst performing major U.S. index. At 2:03 p.m. ET, the small-cap index had dropped 10.73 points, or 1.54%, to 685.55. The Dow Jones Industrial Average (INDU) had retreated 105.02 points, or 0.85%, to 12,179.28.

The bears are in control as investors respond to news of current and possible future downgrades in the financial sector.

There’s speculation that rating agencies Moody’s, Standard & Poor’s and Fitch will move to downgrade major bond insurers MBIA Inc. (NYSE: MBI) and Ambac Financial Group, Inc. (NYSE: ABK).

That will create problems for banks that hold bonds insured by MBIA and Ambac, possibly leading to billions in writedowns.

Elsewhere, brokerage house Merrill Lynch & Co., Inc. (NYSE: MER) downgraded government-sponsored mortgage lender Freddie Mac (NYSE: FRE) to “sell” from “hold.”

Small-cap stocks have fallen more than their bigger brothers, with Cbeyond, Inc. (Nasdaq: CBEY), a provider of Internet protocol-based (IP) communications services, being one of the biggest losers.

The Russell 2000 (NYSE: IWM) has declined more than the other major U.S. indices on news of an imminent downgrade of bond insurers.

At 11:46 a.m. ET, the small-cap index was down 8.11 points, or 1.16%, to 688.17. The Dow Jones Industrial Average (INDU) had lost 70.09 points, or 0.57%, to 12,214.21.

Wall Street is firmly in negative territory following news that rating agencies Moody’s, Standard & Poor’s and Fitch will move to downgrade major bond insurers MBIA Inc. (NYSE: MBI) and Ambac Financial Group, Inc. (NYSE: ABK).

Bond insurers guarantee bonds purchased by investors by agreeing to pay interest and principle if the issuer doesn’t do so. The insurers’ triple-A rating is a seal of approval for investors looking for safe investments.

A downgrade of MBIA and Ambac will create problems for banks that hold bonds they insure, possibly leading to billions in writedowns.

Among small-cap stocks, shares of trucking and transportation companies are among the worst performers.

Patriot Transportation Holding, Inc. (Nasdaq: PATR), whose trucks operate in the Southeastern United States, has shifted into lower gear.

Similarly, shares of general commodities transporter USA Truck, Inc. (Nasdaq: USAK) have also slowed down. Chattanooga, Tenn.-based Covenant Transportation Group, Inc. (Nasdaq: CVTI) is also tapping on the breaks.

Elsewhere, portable storage solutions provider Mobile Mini, Inc. (Nasdaq: MINI) has agreed to buy Mobile Services Group for about $701.5 million.

The Russell 2000 (NYSE: IWM) is going strong on positive comments from a Fed official and news that billionaire Warren Buffet can help bond insurers. At 1:10 p.m. ET, the small-cap index had climbed 8.82 points, or 1.26%, to 708.57. The Dow Jones Industrial Average (INDU) had advanced 181.52 points, or 1.48%, to 12,421.53.

Stocks have been in the green out of the gate on news that billionaire investor Warren Buffett has offered to have his company, Berkshire Hathaway, assume responsibility for $800 billion of municipal bonds guaranteed by bond insurers MBIA Inc. (NYSE: MBI), Ambac Financial Group Inc. (NYSE: ABK) and Financial Guaranty Insurance Co.

There have been concerns recently that the three companies could be downgraded due to write-downs from insuring subprime debt.

Investors took the news as bullish even though one of the three bond insurers turned down the offer while the other three have not yet replied. The bond insurers would like relief with their entire portfolio, but Buffet is only offering help for their relatively safe municipal bond holdings.

The Russell 2000 (NYSE: IWM) and the other major U.S. indices are rising on news of a narrower-than-expected loss at General Motors Corp. (NYSE: GM) and financial relief.

At 10:16 a.m. ET, the small-cap index had advanced 8.54 points, or 1.22%, to 708.29. The Dow Jones Industrial Average (INDU) had added 192.33 points, or 1.57%, to 12,432.34.

Stocks small and large climbed out of the gate following news that GM swung to a fourth-quarter net loss that was not as bad as the one predicted by analysts. The Detroit-based carmaker also announced that it will offer buyouts or early retirements to all the 74,000 U.S. hourly workers represented by the United Auto Workers union in order to cut down on costs.

Helping the bulls gain traction is news that billionaire investor Warren Buffett has offered to have his company, Berkshire Hathaway, assume responsibility for $800 billion of municipal bonds guaranteed by bond insurers MBIA Inc. (NYSE: MBI), Ambac Financial Group Inc. (NYSE: ABK) and Financial Guaranty Insurance Co.

There are fears that the three companies could be downgraded due to writedowns stemming from the subprime mess. A downgrade would make it difficult to find clients and would lower the value of many of the bonds that it insures, causing more write-offs at banks and other financial institutions.

One of the three bond insurers has turned down the offer while the other two are still thinking it over, but investors are nevertheless in a buying mood.

Posting a solid gain is Evercore Partners Inc. (NYSE: EVR), a small-cap investment banking company that reported fourth-quarter earnings above Wall Street’s expectations.

On the flip side, Cynosure Inc. (Nasdaq: CYNO) reported fourth-quarter net income that disappointed analysts despite the fact that it was 300% better than a year ago. The maker of light-based aesthetic and medical treatment systems also said that revenues jumped 49%.

General retailer 99 Cents Only Stores (NYSE: NDN) barely beat analysts’ third-quarter earnings projections.

The Russell 2000 (IWM) and the other major indices posted significant declines despite news of an expected interest rate cut. The small-cap index dropped 9.71 points, or 1.38%, to 695.49. The Dow Jones Industrial Average (INDU) shed 37.47 points, or 0.30%, to 12,442.83.

On a year-to-date basis, the Russell 2000 has let go 9.21%, while the Dow has declined 6.20% and the S&P 500 has dropped 7.67%.

“Financial markets remain under considerable stress, and credit has tightened further for some businesses and households,” the Federal Open Market Committee said in a statement this afternoon, explaining its decision to lower its target federal funds rate 0.50% to 3%.

“Today’s policy action, combined with those taken earlier, should help to promote moderate growth over time and to mitigate the risks to economic activity,” said the FOMC.

The move follows an emergency rate cut on Jan. 22, which saw the target interest rate fall to 3.5% from 4.25%. The Fed is acting aggressively to prevent an economic recession and today promised to “act in a timely manner as needed” in order to address “downside risks to growth.”

The Russell 2000 (NYSE: IWM) fell but was the best performer among the major U.S. indices during a memorable session. The small-cap index fell 1.61 points, or 0.24%, to 671.57, its third consecutive decline. The Dow Jones Industrial Average (INDU) lost 128.11 points, or 1.06%, to 11,971.19.

On a year-to-date basis, the Russell 2000 has let go 12.33%, while the Dow has retreated 9.75% and the S&P 500 is missing 10.75%.

An extraordinary day of trading began with a steep drop despite news that the U.S. Federal Reserve decided to lower the target federal funds rate, the rate at which commercial banks make overnight loans to each other, to 3.5% from 4.25%.

That’s the biggest cut in more than 20 years and since the terrorist attacks in 2001 that the central bank is cutting interest rates between regularly scheduled meetings.

“The Fed acted today in part to offset negative sentiment and psychology,” said Stephen Wood, Senior Portfolio Strategist at the Russell Investments, the group behind the Russell 2000 index, in a phone interview. “I think there will be another cut on Jan. 30.”

The Fed is scheduled to conclude a two-day policy meeting on Jan. 30.

But stocks tumbled out of the gate despite news of the interest rate cut. Investors apparently got the jitters as fears of a U.S. economic recession spread globally, while more bad news came from the financial sector.

Bank of America Corp. (NYSE: BAC) reported that its fourth-quarter net income declined 95% to $0.05 per share from $1.16 per share a year earlier due to $5.28 billion in collateralized debt obligation write-downs.

Ambac Financial Group, Inc. (NYSE: ABK) interim CEO Mike Callen acknowledged that the market value of the bond insurer has “plummeted” after its credit rating was cut Friday. Ambac abandoned a plan to raise $1 billion to defend its “AAA” credit rating after its stock price spiraled down and Moody’s cautioned of a downgrade. Also Friday, Fitch Ratings decreased Ambac’s debt rating to “AA” and warned that its rating might fall even more.

“Ambac and the industry clearly are facing trying times in the marketplace. Both of these [ratings] are external assessments of our business and future,” Callen said during a midday conference call. “We at Ambac believe that they underestimate our company’s strengths.”

The lower rating could prevent Ambac from acquiring new business, especially with municipalities, which typically place great emphasis on “AAA” ratings. Better ratings enable municipalities to pay lower interest rates on issued bonds.

“We believe we can build capital to maintain our ‘AAA’ under Moody’s and S&P, as well as reacquire it under Fitch,” Callen said. “We said that we intended to raise $1 billion or more. Unfortunately, Moody’s unexpected announcement and the consequent stock price decline left us in a position of not knowing how much we would have to raise to maintain a ‘AAA’ [rating] and led us to conclude that raising capital was not an attractive option at that time.”

Callen made the comments during a two-hour conference call that at times was snagged by technical difficulties and inexplicable behavior by some listeners. While David Wallis, a senior managing director, discussed a fourth-quarter credit impairment charge, a female voice interrupted Wallis and said, “That’s awesome.” During the question-and-answer segment of the call, CFO Sean Leonard was interrupted by a loud male voice making a groan while Leonard discussed Ambac’s involvement with mortgage-backed securities. Ambac’s executives nervously laughed off the interruptions. Additionally, the conference was marred by technical problems that caused the call to go mute several times.

The Russell 2000 (NYSE: IWM) and the other major U.S. indices are deep in the red amidst recession fears and an interest rate cut.
 
At 10:19 a.m. ET, the small-cap index had fallen 8.88 points, or 1.32%, to 664.30. The Dow Jones Industrial Average (INDU) was down 230.13 points, or 1.90%, to 11,869.17.

Stocks small and large are posting declines due to fears of a U.S. recession and sell-offs on some overseas exchanges.

Increased worries of an economic recession motivated the U.S. Federal Reserve to make an emergency cut in the federal funds rate to 3.50% from 4.25%.

The Fed has not moved to lower its target rate between meetings since September 2001, in the wake of the terrorist attacks. Its next regularly scheduled meeting is on Jan. 29 and 30.

“The Committee took this action in view of a weakening of the economic outlook and increasing downside risks to growth,” the Fed said in a statement. “While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households.”

The Russell 2000 opened with a large drop, losing more than 3% right of the bat, with the Dow posting a slightly smaller loss. But stocks trimmed those numbers and the roles reversed, the Dow now posting a deeper decline.

The Russell 2000 (NYSE: IWM) fell as investors were not impressed with a stimulus package designed to prevent a recession. The small-cap index tumbled 7.39 points, or 1.09%, to 673.18, its second consecutive decline. The Dow Jones Industrial Average (INDU) lost 59.91 points, or 0.49%, to 12,099.30.

On a year-to-date basis, the Russell 2000 is down 12.12%, while the Dow has declined 8.79% and the S&P 500 is missing 9.75%.

The U.S. economy is in a recession and policymakers will not be able to do much about it. It appears that was the dominating sentiment on Wall Street as the major U.S. indices posted a second day of losses despite news of a stimulus package designed to invigorate the economy.

But stocks small and large actually began trading in the green following news that General Electric Co. (NYSE: GE) reported a rise in fourth-quarter profit, matching analysts’ expectations.

Also contributing good news was Armonk, N.Y.-based International Business Machines Corp. (NYSE: IBM), which reported fourth-quarter earnings and issued a 2008 guidance above projections.

However, the bullish sentiment did not last. Stocks lost steam ahead of President Bush’s speech to discuss an economic stimulus package and stayed below the flat line after details were made public.

“There is a risk of a downturn,” President Bush said today. “I have concluded that additional action is needed.”

The Russell 2000 (NYSE: IWM) and the other major U.S. indices fell hard today on news of bad economic reports and Bernanke’s congressional testimony. The small-cap index let go 19.34 points, or 2.76%, to 680.57, its lowest level in more than one year. The Dow Jones Industrial Average (INDU) fell 306.95 points, or 2.46%, to 12,159.21.

On a year-to-date basis, the Russell 2000 is down 11.16%, while the Dow has deteriorated 8.33% and the S&P 500 has lost 9.20%.

Stocks small and large plunged today on more fears about the sad state of the U.S. economy.

“Incoming information has suggested that the baseline outlook for real activity in 2008 has worsened and that the downside risks to growth have become more pronounced,” U.S. Federal Reserve chairman Ben Bernanke told Congress today. “In light of recent changes in the outlook for and the risks to growth, additional policy easing may well be necessary.”

“We believe the Fed will be aggressive in cutting the Federal Funds rate in a series of 50 basis point cuts, starting with one on January 30th,” said Arun Raha, vice president of Economic Research and Consulting for the North American operations of reinsurance company Swiss Re, in an email.

But investors focused on the grim economic picture and allowed the bears to completely dominate trading. Equities actually began the session with modest gains but were quick to lose their grip.

Bernanke’s testimony coincided with the release of the Federal Reserve Bank of Philadelphia’s general economic index, which showed that the region’s manufacturing activity contracted more than forecast in January.

Ambac Financial Group, Inc. (NYSE: ABK) shares are plunging after ratings agency Moody’s Investors Services placed the insurer’s credit rating on review for a potential downgrade from its “AAA” rating.

Ambac said in a statement that it is assessing the impact of Moody’s action and held a morning conference call to discuss the situation. Moody’s said Ambac’s recent quarterly losses, changes in management and plans to raise capital justify the credit review.

Ambac on Thursday said it's assessing its previously disclosed capital plan in light of what it called a "surprising" announcement by Moody's Investors Service in which the ratings agency said it was placing Ambac under review for a possible downgrade.

During the conference call, the New York City-based firm said it is “confident” about its insured portfolio and will discuss the Moody’s review on a conference call scheduled for Jan. 22.

In midday trading, ABK shares are down 54.36%, or $7.05, at $5.92. Shares have taken a wild ride over the last 52 weeks, ranging from $4.50 to $96.10.

The Russell 2000 (NYSE: IWM) and the other major U.S. indices are hurting as investors react to Bernanke’s testimony. At 1:19 p.m. ET, the small-cap index was down 8.62 points, or 1.23%, to 691.29. The Dow Jones Industrial Average (INDU) had dropped 125.51 points, or 1.01%, to 12,340.65.

“The baseline outlook for real activity in 2008 has worsened and the downside risks to growth have become more pronounced,” U.S. Federal Reserve chairman Ben Bernanke told lawmakers on Capitol Hill today.

That spooked investors and small-cap stocks, which were already trading below the flat line, extended their declines.

The Fed chief painted a bleak picture of the current state of the U.S. economy, saying that labor market conditions in December were “disappointing” while investment in equipment and software has slowed.

What needs to be done?

“I agree that fiscal action could be helpful in principle,” Bernanke said. “Fiscal and monetary stimulus together may provide broader support for the economy than monetary policy actions alone.”

But he was careful not to endorse any specific stimulus package and emphasized that the measures should come into force quickly if they are to have a positive effect on the economy.

Bernanke did not talk much about the Fed’s policy meeting on Jan. 29 and 30, but hinted at a possible interest rate cut.

The Russell 2000 (NYSE: IWM) and the other major U.S. indices are falling as investors listen to Ben Bernanke.

At 10:36 a.m. ET, the small-cap index had lost 10.31 points, or 1.47%, to 689.60. The Dow Jones Industrial Average (INDU) had declined 93.48 points, or 0.75%, to 12,372.68.

Stocks opened in the green but lost ground as investors digested the latest economic news and tuned in to hear U.S. Federal Reserve Chairman Ben Bernanke testify before the House Budget Committee.

Calls for a policy response to prevent the U.S. economy from slipping into recession have been mounting and all eyes are on the Fed chief as he discusses the overall state of the economy. Many observers expect that the Fed will lower the federal funds rate, which currently stands at 4.25%, when it next meets on Jan. 29 and 30.

In economic news, the U.S. Census Bureau reported before the start of trading that housing starts fell 14% to a seasonally adjusted annual rate of 1.006 million units, below November’s downwardly revised total of 1.173 million.

An estimated 1,376,100 housing units were authorized 2007, a stunning 25.3% below the 2006 figure of 1,838,900. That’s the worst one-year decline in nearly 30 years.

The situation will not improve soon and the housing sector appears to be headed for a third year of stagnation.

That’s because building permits, a sign of future construction, fell 8.1% to an annual rate of 1.068 million units.

Economists were expecting December housing starts and building permits to post smaller declines.

In more economic news, the U.S Labor Department announced that initial jobless claims for the week ended Jan. 12 decreased 21,000 to 301,000, from the preceding week’s unrevised figure of 322,000.

The 4-week moving average, a more stable measure, fell 11,750 to 328,500, from the preceding week’s downwardly revised average of 340,250.