Tag - Bgp

Investors saw lots of red in today’s trading session as regional manufacturing data suggested that economy is not picking up as much as had been hoped. Most economists had expected gains in the New York Fed’s manufacturing index but were instead treated to numbers indicating that the factory sector shrank at a more severe rate than expected.

A stronger U.S. dollar pulled oil below $70 away from its eight month high.

As of press time, 3:30 P.M. Eastern, the Dow was down -194.75 to 8,604.50; the Nasdaq was down -46.29 to 1,812.51, and the S&P 500 was down -23.25 at 922.96.

The Russell 2000 Index, comprised of the top 2,000 small-cap stocks, was down 16.77 at 510.06.

Bucking the downward trend today was pharma and financials. Two of the top percentage gainers were JazzPharma (Nasdaq:JAZZ) up 69.7% on positive news about it fibromyalgia drug and MAP Pharma (Nasdaq:MAPP) up 11.89%. MAPP has been on a tear since late May when it shot up to $11.39 from $3.15.

Other small-caps showing leadership today include QEP (Nasdaq:QEPC) up 39.07%, Tongxin Intl (Nasdaq:TXICU) up 24.75%, and two financials, American Capital (Nasdaq:ACAS) up 14.67% and New Century Bancorp (Nasdaq:NCBC) up 14.83%.

Small-cap decliners were lead by Oil-Dri Corp. of America (NYSE:ODC) down 23.24% following Friday’s news that it will lose its largest customer in the cat litter retail segment. Other leading decliners include Virgin Mobile USA (NYSE:VM) down 16.98%, book retailer Borders Group (NYSE:BGP) down 13.16%, and Integrated Electrical Services (Nasdaq:IESC) down 17.64%.

*****Summer doesn’t officially start for a few more days. Tell that to the parents who are now getting their kids off to camp or getting ready for vacation. For the standard two-income household, living easy in summertime is just a memory.

Including today, we have just 12 more trading days until the end of June and the end of the second quarter. I suspect we will have seen the highs for stock prices by then. That is, if we haven’t seen them already.

Oil backed off recent highs on Friday. And that’s likely to continue. Oil was too cheap at $33 a barrel. But $73 is too high, at least for now while much of the developed world is still mired in an economic downturn. We know demand is still weak. And we know there are looming supply issues when demand picks back up. However, the issue right now is the economy.

*****Oil has been rallying as the news cycle has been relentlessly optimistic about an imminent economic recovery. In fact, many leading economists expect U.S. GDP to actually grow in the third quarter.

Oil stocks that we’ve been following have been on a tear the market bottom, including Graham Corp. (AMEX:GHM) up 81%; Brigham Exploration (Nasdaq:BEXP) up 239%; Gulfport Energy Corp. (Nasdaq:GPOR) up 326%. Even the majors like ExxonMobil (NYSE:XOM), Chevron (NYSE:CVX), BP (NYSE:BP), and ConocoPhillips (NYSE:COP) are bringing investors some decent returns, though not as great as small-cap stocks in the same sector.

Investors have bought the rumor of economic recovery. We’ll see how they respond to the news. I’ll be watching oil as the leading indicator for economic expectations.

Right now, it seems like stock prices have priced in a modest recovery. And if investors perceive that there’s not much upside left for stock prices, it would makes sense to trim exposure, take profits, or however you want to put it.

*****We’ve seen anecdotal evidence that investors are moving funds out of the stocks that have led the market higher. Technology has been having trouble making headway. And we’ve seen strength in healthcare and consumer staple stocks. Plus, the Volatility Index (VIX), which measures the cost of put options (which rise in value as stocks or indices fall, thereby giving investors downside protection) has been on the rise.

This suggests that investors are preparing for a downside move for stock prices, or, at the very least, protecting gains they have made.

*****On Mondays, I’m going to start offering a look at the economic data coming out during the week ahead. This week is a bit unusual as all the economic data is out on Tuesday. Tomorrow we get Housing Starts, Building Permits and the Producer Price Index (PPI).

Of course, consumers will focus on the housing numbers. But I’d expect any numbers will be interpreted with optimism. Investors seem to understand that the bottoming process for the housing market will be volatile and that wild swings in the data should be expected.

In my opinion, the PPI is the one to watch. The U.S. dollar rallied a bit last week, but there’s no doubt that massive Treasury bond sales have investors worried about a weaker dollar the potential for inflation to pick up. Add to that improving retail sales numbers, helped by higher gasoline prices, and you have the potential for a higher-than-expected PPI reading. Needless to say, that would not be good for stocks.

I’ll talk to you tomorrow.

Ian Wyatt

P.S. You’ll recall from Friday’s issue we start sharing charting analysis from TradeMaster’s technical analyst, Jason Cimpl. If you didn’t have a chance to catch, here’s the link. You’ll get his take on this week’s market direction. Since this is a new feature for Daily Profit I’d greatly appreciate receiving any feedback from you on it.

SI International Inc. (Nasdaq:SINT), Talbots Inc. (Nasdaq:TLB) and Borders Group Inc. (Nasdaq:BGP) are among the biggest percentage gainers in Wednesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Northern Dynasty Minerals Ltd. (Nasdaq:NAK), Quiksilver Inc. (Nasdaq:ZQK), Midwest Banc Holdings Inc. (Nasdaq:MBHI), TomoTherapy Inc. (Nasdaq:TOMO), Community Bankshares Indiana Inc. (Nasdaq:CBIN) and Chico's FAS Inc. (Nasdaq:CHS).

Here are the biggest percentage gainers among small caps:

Small caps spiked out of the gate and remain in at their highs mid-session, as durable goods orders came in stronger than expected, overshadowing crude’s assent and new layers uncovered for the credit crunch.

At 12:24 p.m. ET, the Russell 2000 (NYSE:IWM) was up 9.91, or 1.31%, at 733.42.

Durable goods orders increased a robust 1.3% in July, clocking in substantially above economists’ projections for a skimpy increase of 0.1%. Transportation orders accounted for the bulk of the increase, which was expected to prop up the number. However, the welcoming surprise was that sans transportation orders, durable good orders still managed to eek out a 0.7% increase, while the consensus was looking for a decline. Excluding the transportation number yields a clearer picture of business spending.

Non-defense capital goods orders excluding aircraft and non-defense capital goods shipments were up for a second straight month, up 2.6% and 1.6% respectively. Both are positive indications for current and future capital spending.

“This is two months in a row of decent strength,” Andy Busch, foreign exchange strategist for BMO Capital Markets said. “And for July, the strength was across the board. The third quarter is starting off on a very positive note, and suggests upside risk for tomorrow's revision to Q2 real GDP.”

Also in positive news, Atlanta Fed President Dennis Lockhart gave a speech on inflation this morning, stating that headline CPI will peak near the July level and that the current Federal Reserve monetary policy approach is consistent with an easing in overall inflation, hinting that rates will most likely remain at current levels for some time.

Borders Group Inc. (NYSE:BGP) gained a quarter of its value this morning after reporting a narrower-than-expected second-quarter loss.

The Ann Arbor, Mich.-based book retailer said it lost $11.3 million, or $0.19 per share, for the quarter ended Aug. 2, compared with a loss of $18.1 million, or $0.31 per share, in the same period last year.

Analysts polled by Thomson First Call were expecting a loss of $0.29.

The company cited a focus on expense reduction, inventory management and improved gross margin for the results.

By mid-morning, Borders is at $6.68, up $1.32 from Tuesday's close. The stock has traded as low as $3.87 and as high as $16.62 during the past 52 weeks.

For detailed price information and news stories on Border's click BGP.

Book retailer Books-A-Million Inc. (Nasdaq:BAMM) is off 8% today after falling to a 52-week low on above-average trading volume. The Birmingham, Ala.-based retailer fell to $5.27 early in the trading day, but it has rebounded some to trade at $5.65 at 3:11 p.m. ET, down $0.51 from Thursday’s close. Competitor book retailer Borders Group Inc. (NYSE:BGP) also fell to a low for the year after shedding 10% to $4.10 at 3:11 p.m. ET in today’s trading. Both companies are down more than 50% since January as the economy remains weak and consumer spending has dropped.

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 have been on a rollercoaster ride in Wednesday trading after opening higher, slipping into the red midday and returning to the green in afternoon action as the showdown between crude oil and stocks resumed and investors digested a better-than-expected durable goods order.

At 1:17 p.m. ET, the Russell 2000 (NYSE:IWM) was up 0.16, or 0.02%, to 734.55, while the Dow was up 6.43, or 0.05%, to 12,554.78.

After deflating earlier in the session on news that Saudi Arabia would increase production and that Asian demand could begin to ebb because of high price levels, oil spiked sharply midmorning to resume its upward climb from last week.  At its lowest point of the trading day, the commodity had leaked roughly $3 a barrel.

Though oil reversed course, the dollar remains in the green against the euro and the yen midday, while gold has sold off $7.50 to $900 per troy ounce.

Oil’s climb generally has the affect of pressuring stocks, as traders fear the inflationary impact on consumers’ disposable income for gas, food and discretionary items.

In economic news, small caps were initially lifted this morning after the Commerce Department reported pre-bell that durable goods orders edged down 0.5%; narrower than the forecasted slide of 1%. The bright spot that ignited optimism, however, was on the ex-transportation figure, which was up 2.5%, substantially greater than the consensus forecast of for a gain of 0.5%. Also, orders for non-defense capital goods excluding aircraft leaped 4.2% in April, which is the first increase since December.

Like most things that go the way of the Internet, so, too, goes commerce. Forrester Research estimates that U.S. e-commerce revenues were at $259.1 billion last year, and are growing at nearly 60% annually. This bodes well for CyberSource Corporation (Nasdaq:CYBS) and CAM Commerce Solutions, Inc. (Nasdaq:CADA), two companies benefiting from the move to online commerce from in-person banking.

CyberSource provides electronic payment and risk-management tools for businesses processing orders over the Internet. Approximately 228,000 customers use CyberSource tools, including half the companies in the Dow Industrial Average.

The company offers CyberSource Advanced service for merchants who want to accept online payments via credit cards, corporate procurement cards, electronic checks and the Bill Me Later service. CyberSource Essentials allows merchants to process credit card payments via websites and also processes telephone, fax and mail order payments using a Web-based virtual terminal. The company’s enterprise software processing platform, CyberSource Payment Manager, can authorize and settle payments originating from multiple sales channels. The company’s tools for risk management include Managed Risk Service, which offers professional analysis, risk modeling and monitoring, and Advanced Fraud Screen, a risk-scoring tool for assessing fraud risk, authenticating payers, verifying delivery addresses, making tax payments and ensuring export regulatory compliance.

CyberSource has strategic alliances with most of the leading online payment processors including AmeriNet, Checkfree, FDC/Telecheck, 14 Commerce, PayPal and Visa USA.

With online fraud running rampant, demand for fraud-screening services is rising. Visa and MasterCard are now even requiring merchants to comply with a comprehensive list of payment card security standards to limit the threat of identity theft. Faced with these . . .

The Russell 2000 (NYSE:IWM) closed in positive territory today as investors disregarded bearish economic news. The small-cap index rose 3.99 points, or 0.57%, to 705.27. The Dow Jones Industrial Average (INDU) fell 16.04 points, or 0.13%, to 12,532.60.

On a year-to-date basis, the Russell 2000 has declined 7.93%, while the Dow is down 5.52% and the S&P 500 has shed 7.86%.

Despite a rocky start, small-cap stocks rose for the third consecutive session as the momentum from Monday’s rally empowered the bulls despite generally bearish economic news.

The Conference Board reported before the opening that its index of consumer confidence fell to a five-year low of 64.5 in March from an upwardly . . .

The Russell 2000 (NYSE:IWM) posted a large increase for the second consecutive session on upbeat financial and housing news. The small-cap index advanced 19.86 points, or 2.91%, to 701.28. The Dow Jones Industrial Average (INDU) rose 187.32 points, or 1.52%, to 12,548.64.

On a year-to-date basis, the Russell 2000 has declined 8.45%, while the Dow is down 5.40% and the S&P 500 has lost 8.07%.

Stocks small and large began the day in the green on news before the start of trading that investment bank JPMorgan Chase & Co. (NYSE:JPM) has raised its offer for Bear Stearns (NYSE:BSC) to $10 a share from $2 a share. The move is in response to disgruntled employees at Bear Stearns complaining that the original bid was too low.

The bulls gained strength at 10 a.m. ET, when the National Association of Realtors reported that sales of existing homes rose 2.9% to an annual rate of . . .

The Russell 2000 (NYSE:IWM) raced ahead on news that a manufacturing index declined less than expected. The small-cap index advanced 17.29 points, or 2.60%, to 681.42. The Dow Jones Industrial Average (INDU) climbed 261.66 points, or 2.16%, to 12,361.32.

On a year-to-date basis, the Russell 2000 has shed 11.05%, while the Dow is down 6.81% and the S&P 500 has retreated 9.46%.

Small-cap stocks opened with a modest rise but picked up steam after 10 a.m. ET, when the Philadelphia Federal Reserve reported that its index of regional manufacturing activity showed a reading of -17 in March, while economists had forecasted -20. The reading for February was -24.

The report is the most-watched regional manufacturing index, considered to be a barometer of manufacturing nationwide. Investors disregarded the fact that the data represent the longest period of contraction in five years and pushed stocks higher.

In other bullish news, an analyst said that mortgage purchases by Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) will help right the mortgage market. Today the federal government adopted changes that allow the two companies to invest more in mortgages and related securities.

Shares of Borders Group Inc. (NYSE:BGP) have lost more than 30% on news the book store chain may sell itself. The Ann Arbor, Mich.-based company announced before the start of trading that it is considering strategic alternatives, which include a sale. Borders Group also said that it has received a financial commitment from hedge fund Pershing Square Capital Management L.P., which has promised to lend $42.5 million.

At 2:29 p.m. ET, the shares had dropped $2.80, or 39%, to $4.30.

The following small-cap companies (market capitalizations or values under $750 million) are broadcasting events on Thursday, March 20.

Here are the companies ordered chronologically (all times ET):

The Russell 2000 (NYSE: IWM) fell today as fears of a U.S. economic slowdown gripped Wall Street. The small-cap index lost 9.03 points, or 1.21%, to 740.30, its sixth consecutive decline. The Dow Jones Industrial Average (INDU) let go 211.10 points, or 1.62%, to 12,799.04.

On a year-to-date basis, the Russell 2000 has shed 5.98%, while the Dow has added 2.60% and the S&P 500 has gained 0.01%.

Stocks fell out of the gate and never managed to rise above the flat line as investors digested news of reports forecasting that U.S. economic growth will slow in 2008.

On Tuesday the U.S. Federal Reserve forecasted that growth will slow in 2008 and the unemployment rate will move up from its current level of 4.7%. The Fed sees inflation as remaining moderate.

A second blow came after the start of trading, when the Conference Board announced that its index of leading economic indicators fell more than expected in October. The index slid 0.5%, more than the projected 0.4%, following a downwardly revised gain of 0.1% in September.

The business organization’s report seemingly confirms fears that businesses and consumers will cut back on spending in the face of stagnating house prices and higher energy costs.