Tag - Aly

Small-cap stocks remained sharply lower into mid-session, pressured by fresh worries about the health of the banking sector as we enter into earnings season and by dreadful retail sales numbers this morning.  Some of today’s small-cap gainers were LaBranche (NYSE:LAB), Vahli, Inc. (NYSE:VHI) and Panhandle Oil and Gas (NYSE:PHX).

Other Market Watch highlights today included:

• The Energy Select Sector SPDR Fund was off 4.5% at midday.  
• Crude oil tumbled amid the sell-off in stocks; energy shares were dueling with financials for the biggest downside market hit so far today.  
• Bank stocks took a hit in European trading ahead of today’s opening and those concerns continued to play out during the U.S. session.  
• Financials, commodities, retailers and manufacturers are all taking a hit, but the slide in bank stocks is a major spot of bother.

Small Cap Gainers:

• Goldman Sachs upgrades LaBranche; shares rise 16%. See (NYSE:LAB). 
• Valhi, Inc. up 9% after announcing issuance of final low-level radioactive waste disposal license. See (NYSE:VHI).  
• Panhandle Oil and Gas up 6% after declaring a dividend last week. See (NYSE:PHX).   • Charles River schedules 2008 earnings and 2009 guidance release for Feb. 9; shares rise over 5%. See (NYSE:CRL).  

Small Cap Losers:

• Allis-Chalmers Energy slides 16% as energy stocks are feeling the heat today. See (NYSE:ALY).  
• Cliffs Natural Resources shares drop over 15% on deferral. See (NYSE:CLF).
• National Financial Partners Corp. slides 14% as financials nosedive today. See (NYSE:NFP).  
• North American Energy Partners down over 12% on light volume, pulled down by the slump in energy stocks. See (NYSE:NOA).  

A fresh batch of economic data today was predictably awful, with the New York Manufacturing Survey . . .

Small-cap stocks started out the week with a whimper as bleak manufacturing data, sinking financial and homebuilder shares and money flow away from equities took a toll on the market. The Russell 2000 (NYSE:IWM) closed down 15.86, or 3.39%, at 452.57 and is now down 41% for the year, while the Dow is off 35% and the S&P 500 down 41%.

Bank and financial shares have been a persistent drag on the market in recent days. The big news on the banking front today was an analyst downgrade on JP Morgan Chase and Co. (NYSE:JPM), which pulled down the rest of the financial universe. JPM shares lost 7.4% on the day, and the Financial Select Sector SPDR was off 4.1%. The market also was reluctant to buy bank and financial stocks ahead of earnings releases from Goldman Sachs Group Inc. (NYSE:GS) and Morgan Stanley (NYSE:MS); both firms lost some 1% on the day. Treasury market yields tumbled some 2% on the day, indicating that money was moving toward safe-haven outlets in concert with the weak tone in equities.

A fresh batch of economic data today was predictably awful, with the New York Manufacturing Survey sinking to a record low and the industrial production report showing a decline of 0.6%. That said, both of the reports were actually better than forecast and a much worse reading on manufacturing overnight in Japan didn’t stop the Nikkei from rising 5.2%, so it would be presumptuous to blame today’s . . .

Minefinders Corp Ltd. (Nasdaq:MFN), Tessera Technologies (Nasdaq:TSRA) and Hercules Offshore Inc. (Nasdaq:HERO) are among the biggest percentage gainers in Wednesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: SAVVIS Inc. (Nasdaq:SVVS), Allis-Chalmers Energy Inc. (Nasdaq:ALY), Arris Group Inc. (Nasdaq:ARRS), Meritage Homes Corp. (Nasdaq:MTH), BankAtlantic Bancorp Inc. (Nasdaq:BBX) and Boyd Gaming Corp. (Nasdaq:BYD).

Here are the biggest percentage gainers among small caps:

lis-Chalmers Energy Inc. (NYSE:ALY) is down 12% today as the price of crude oil is falling from the record highs it achieved last week. Crude oil is down from the record more than $146 per barrel that it soared to last week ahead of the July 4 holiday – a busy weekend for travelers. Crude slipped down to $141 per barrel today, pushing down shares of Houston-based Allis-Chalmers, which provides services and equipment to oil and natural gas companies. Allis-Chalmers is trading at $14.57 at 2:09 ET, down $2.02 from Friday’s close.

The Russell 2000 (NYSE: IWM) has trimmed its earlier gains and gone flat. At 2:48 p.m. ET, the small-cap index had retreated 0.45 points, or 0.06%, to 701.13. The Dow Jones Industrial Average (INDU) was up 2.52 points, or 0.02%, to 12,267.65.

Small caps abruptly turned around and dropped into negative territory at about 2 p.m. ET following news that a recession has become more likely, according to Richmond Federal Reserve Bank President Jeffrey Lacker.

Lacker told an audience at Marshall University’s Lewis College of Business that the risks of a recession have recently increased while inflation has not moderated as some expected, according to news reports this afternoon.

The Fed official, who is a voting member of the Federal Open Market Committee, is also quoted as saying that he believes economic growth will be sluggish during the first half of 2008.

News of Lacker’s comments extinguished the modest rally that lifted stocks out of the gate after the U.S. Labor Department reported that productivity increased at an annual rate of 1.8% during the fourth quarter of 2007, outpacing economists’ expectations.

On the topic of Wall Street’s expectations, travel website operator Travelzoo Inc. (Nasdaq: TZOO) reported a fourth-quarter net income that was below what analysts were projecting, causing its shares to decline more than 20%.

Bronco Drilling Company, Inc. (Nasdaq: BRNC) reported this morning that it will be acquired by Allis-Chalmers Energy Inc. (NYSE: ALY) for $$437.8 million, or $16.33 per share.

The purchase price represents a 21.8% premium over the closing price of Bronco Drilling’s stock on Jan. 23 of $13.41, and an 18.2% premium over the past 10 days’ average closing stock price of Bronco Drilling.

Based on the closing stock price of Allis-Chalmers on Tuesday, the merger will result in a combined company with an implied enterprise value of approximately $1.4 billion.
 
Shares of Bronco Drilling (BRNC) gained 14.69%, or $1.97, to $14.69 out of the gate. Shares of Bronco Drilling have been trading in the range of $11.21 to $19.21 for the past 52 weeks.

Although much attention has focused on the strong performance of the major oil companies, far less has been reported about a related sector benefiting from rising energy demand - oilfield services providers. These companies provide technologies for drilling wells and boosting production. Demand for their services is cyclically linked to oil industry capital spending, which tends to be less volatile than oil prices.  

Energy prices remain near historic highs in 2007 as a result of global economic growth, rising demand from China and India, supply disruptions and political tensions in parts of Africa and the Middle East and a shortage of refinery capacity. 

High energy prices are fueling record levels of exploration and production spending. British Petroleum will increase capital spending to $18 billion in 2007 and targets annual production growth through 2012.  ExxonMobil increased spending to $20 billion in 2006 and plans to maintain capital spending in that range for several years. Chevron increased capital spending 50% in 2006 to $16.6 billion and plans to increase 2007 spending to $19.6 billion.