Tag - Chrs

Stocks are rising in afternoon trading after Treasury Secretary Timothy Geithner told Congress that some banks could be allowed to repay financial bailout funds.

At 1:24 pm ET, the Russell 2000 (NYSE:IWM) is up 2.47% at 463.65, while the Dow is up 0.74% and the S&P 500 is climbing 1.13%.

Small caps on the move today include retailer Pacific Sunwear (Nasdaq:PSUN), up nearly 20% after it renewed an extension agreement with Alliance Data Systems, and retailer Charming Shoppes, Inc. (Nasdaq:CHRS), which is up 14% on lower-than-average volume.

*****Treasury Secretary Tim Geithner is having his “Lucy” moment today. Yes, he’s got “a lot of explaining to do …”

He spoke Congress today to answer questions as to how the Public-Private Investment Program will actually remove toxic assets and protect taxpayer money at the same time. Also up for explanation is how the remaining $110 billion in TARP money is enough to fund any future bank rescues.

I don’t envy Geithner one bit. That’s because there’s no way he can adequately answer these questions:

If TARP’s $110 billion is sufficient, why is the government talking about accepting equity in return for as much as $200 billion in bailout funds?

How can you provide loans to private investors to minimize the risk of toxic asset purchases, pay the banks a premium for those assets and still believe that taxpayers can make off the deal?

There’s no way everybody can make money of these deals. The taxpayer is taking on the most risk and has the most to lose. 

*****No word on why Geithner thinks $110 billion is sufficient to keep the bailouts rolling. Goldman Sachs mortgage analysts think another $400 in bank . . .

Small-cap stocks started out what is traditionally one of the quietest weeks of the year in the stock market with a jolting decline as concerns about corporate profits and the slumping economy took a toll on retailer, tech stocks, automakers and energy shares. However, a late bounce off the worst levels of the day took some of the sting out of the decline. The Russell 2000 (NYSE:IWM) closed down 11.19, or 2.30%, at 475.07.

Risk appetite on the equity side of things was also an issue today, with small caps noticeably underperforming large caps most of the day. Part of that might have been an adjustment off the nice rise last Friday and Tuesday for small-cap fare. Still, despite the soft tone in equities, Treasury markets were relatively tame and actually were lower into the final hour of trading, which suggests investors weren’t fleeing stocks for safe-havens, they were just worried about stocks in general.

A big part of that worry was likely tied to expectations for this year’s shopping season to be dismal. Last weekend was supposed to spark a final rush of last-minute holiday shopping, but dreadful weather in many locations probably kept shoppers huddled up indoors instead of at the stores. The International Council of Shopping Centers is anticipating holiday sales to drop as much as 1%, the largest decline since at least 1969, when the group started tracking data.

The U.S. economy is heavily dependent on consumer spending, but with the economy in recession all year and unemployment climbing to the highest levels in a generation, even steep discounts at the stores haven’t been able to save holiday cheer for retailers. The S&P Retail Index tumbled more than 4% today. As for small-cap shops on the move today, Charming Shoppes Inc. (Nasdaq:CHRS) collapsed 20%, basically giving back most of Friday’s dramatic surge. That theme of giving back . . .

The Russell staged a dramatic comeback at Friday’s closing, closing up a stunning 4.66%, and shooting nearly 12% off an intraday trough that marked the lowest point since August 2003. Other Market Watch highlights today included:

• In what will be forever remembered as a historic week for the stock market, small caps shed 15.6% in an unprecedented collapse this week.
• From a charting and index perspective, the late recovery move in stocks today was paced by small caps, which was an encouraging sign.
• If small caps start to show a leadership role in the coming days, it could be a sign that a bottom, or at least stabilization is nearby. 
• AMR Corp, Delta and Continental Airlines were among the most actively traded small caps today amid falling oil prices.
• Crude oil prices tumbled 10% today to fresh one-year lows.

Small Cap Gainers:

• Alaska Air Group (NYSE:ALK) closed up about 30% on momentum from the decline in energy prices, late day small-cap recovery moves.
• Ardea Biosciences Inc. (Nasdaq:RDEA) jumped some 39%, recovering from new move lows set Thursday.
• Material Sciences Corp. (NYSE:MSC) up 25.2% on slight increase in Q2 earnings reported Thursday.
• Willis Lease Finance (Nasdaq:WLFC) up 26% after $63M sale of 10 . . .

Koss Corp. (Nasdaq:KOSS), Solarfun Power Holdings Co Ltd. (Nasdaq:SOLF) and Charming Shoppes Inc. (Nasdaq:CHRS) are among the biggest percentage losers in Wednesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: First M&F Corp. (Nasdaq:FMFC), Pilgrim's Pride Corp. (Nasdaq:PPC), Versant Corp. (Nasdaq:VSNT), eTelecare Global Solutions Inc. (Nasdaq:ETEL), Stoneridge Inc. (Nasdaq:SRI) and Ames National Corp. (Nasdaq:ATLO).

Here are the biggest percentage losers among small caps:

Charming Shoppes Inc. (Nasdaq:CHRS) dropped 7.3% this morning as the specialty apparel retailer announced before the bell that it had swung to a wider-than-expected loss for the second quarter.
 
The Bensalem, Pa.-based firm reported a loss from continuing operations of $3.7 million, or $0.03 per share compared with income from continuing operations of $20.9 million, or $0.16 per share, for the same period last year.
 
Analysts had expected a loss of $0.01 per share.
 
The results include after-tax charges of $5.8 million, or $0.05 per share, related to the severance agreement between Charming Shoppes and its former CEO, and $3.5 million, or $0.03 per share, related to previously announced consolidation and streamlining initiatives.
 
Looking ahead, the firm expects to lose between $0.09 and $0.11 in the third quarter. Analysts were expecting a loss of $0.01 for that three-month period.
 
At mid-day, Charming Shoppes is at $5.21, down $0.41 from Tuesday's close. The stock has traded between $4.01 and $9.52 in the past year.
 
For detailed price information and news stories on Charming Shoppes, click CHRS.

The Russell 2000 (NYSE:IWM) is sinking into negative territory, posting losses steeper than those of the other major U.S. indices. At 2:13 p.m. ET, the small-cap index was down 4.95 points, or 0.71%, to 687.44. The Dow Jones Industrial Average had declined 22.88 points, or 0.19%, to 12,279.58.

For no apparent reason, small caps slipped below the flat line after 12 p.m. ET, and briefly attempted to recover before settling on a steeply downward trajectory at about 1:30 p.m. ET.

Shares of companies offering school services are the worst performing industry group, followed by retailers.

Among the losers is Charles Town, W.Va.-based American Public Education, Inc. (Nasdaq:APEI), which provides online postsecondary education to . . .

Shares of Charming Shoppes, Inc. (Nasdaq:CHRS) are in negative territory on news before the start of trading that fourth-quarter net sales declined. The Bensalem, Pa.-based retailer of women’s plus-size apparel reported that net sales for the thirteen weeks ended Feb. 2, 2008, were $784.9 million, a decline of 10% compared with sales of $874.0 million in the same period of 2007.

“Clearly, our performance during the fourth quarter was extremely disappointing, and was impacted by downward traffic trends and response rates to our stores and catalogs, which we continue to experience,” said CEO Dorrit Bern in a statement.

At 2:34 p.m. ET, the stock had retreated $0.62, or 12%, to $4.69. For detailed price information and recent news stories about Charming Shoppes, click CHRS.

The Russell 2000 (NYSE: IWM) has held on to its gains despite more bad economic news. At 3:15 p.m. ET, the small-cap index had advanced 6.54 points, or 0.93%, to 708.88. The Dow Jones Industrial Average (INDU) was up 93.62 points, or 0.76%, to 12,430.84.

Small-cap stocks are posting a modest rise as a rebound that began halfway through the session is apparently undeterred by news of a bearish economic forecast by the U.S. Federal Reserve.

At 2 p.m. ET, the central bank released the minutes from its regular policy meeting held on Jan. 29 and Jan. 30. The Fed lowered its estimate for economic growth for 2008 and added that it expects a rise in inflation and unemployment.

The jobless rate is projected at between 5.2% and 5.3%, up from the current level of 5%.

Retailers experienced an anti-climatic end to 2007, as Wall Street began sounding the alarm for recession and caused consumers to pull in their purse strings. The cloud has continued to hang over retail stocks into 2008 and Susquehanna Financial’s outlook for the sector’s fourth quarter and fiscal 2008 cautions that the clouds haven’t dissipated.

“Given the weak consumer environment, we believe retailers that only reported holiday sales and did not provide additional commentary during their sales release have a greater chance of realizing greater volatility heading into fourth-quarter 2007 results,” Susquehanna Financial analyst Michael Thurow wrote in a retailer’s research report today. 

For January, Susquehanna Financial analyst Thomas Filandro is projecting a sector comp decline of 3% to 5%, compared with an increase of 2.5% last January, as the analyst says the majority of the sector employed aggressive promotions.
 
“Although it is unclear whether or not a recession will hit in 2008, it is clear that consumers remain on edge and extremely cautious regarding spending on apparel and accessories,” Filandro wrote.

Looking past January, the analyst says aside from dealing with a skittish consumer, retailers will be faced with an earlier Easter holiday this year that typically shortens the initial spring selling window and may result in higher seasonal markdowns.

Charming Shoppes, Inc. (Nasdaq: CHRS), lowered its guidance for its fourth quarter and fiscal 2008 year, citing a continued decrease in traffic levels in its stores during the holiday season as well as lackluster consumer spending.

For the fourth quarter ending Feb. 2, the plus-size women's apparel retailer said it now expects a wider net loss per share in the range of $0.17 to $0.20, from the originally forecasted range of a net loss of $0.06 to $0.08 per share. The small cap reported net profit of $0.19 per share for the fourth quarter of 2007. Nine analysts polled by Thomson Financial were on average forecasting a net loss per share of $0.07.

The company attributed its lowered guidance to response taken to counteract a bleak macroeconomic environment during the holiday season. The company implemented more aggressive promotional markdowns to drive sales of seasonal merchandise. The markdowns, however, resulted in lower merchandise margins at each of its retail brands and led to downwardly revised earnings expectations for the fourth quarter

Charming Shoppes also attributed its new projection to pre-tax charges of $15.4 million related to the company's relocation of its Catherines Plus Sizes Memphis, Tenn. operations to its Bensalem, Pa. offices, as well as an initial pre-tax investment related to the launch of its Lane Bryant catalog.

For the fiscal year ending Feb. 2, 2008, the Bensalem, Pa.-based company lowered projections for earnings per share to the range of $0.12 to $0.15 from the previously forecasted range of $0.24 to $0.26. Charming Shoppes recorded earnings per share of $0.81 for fiscal 2007. Seven analysts polled by Thomson Financial were on average projecting EPS of $0.26 per share.

Shares of Charming Shoppes (CHRS) were halted in pre-market trading.

The Russell 2000 (NYSE: IWM) rallied and posted gains for the fourth consecutive day on news that the American consumer remains strong. The small-cap index added 18.06 points, or 2.35%, to 785.60. The Dow Jones Industrial Average (INDU) climbed 205.01 points, or 1.55%, to 13,450.65.

On a year-to-date basis, the Russell 2000 is off 0.23%, while the Dow is up 7.83% and the S&P 500 has risen 4.79%.

The bulls completely dominated trading today on news that personal spending rose a better-than-expected 1.1% in November, according to the U.S. Commerce Department. The increase, the biggest in over three years, came as consumers responded favorably to holiday discounts offered by retailers.

Economists were expecting spending to increase 0.7% after a rise of 0.2% in October.

The news calmed fears that consumers will cut back on spending due to falling home prices and higher energy costs. Consumption is about 70% of gross domestic product.

However, Americans are still apprehensive about the economy and their personal finances.

A Reuters/University of Michigan consumer survey showed that consumer sentiment fell to 75.5 in December from 76.1 in November. That’s the lowest level since September 2005, when the country was dealing with the aftermath of Hurricane Katrina.

Economists had actually forecasted a slightly steeper decline to 74.5. Consumer sentiment measures whether or not consumers feel like spending money.

The Commerce Department also reported that personal income in November rose a lower-than-expected 0.4% following an increase of 0.2% in October.

In corporate news, Merrill Lynch (NYSE: MER) also contributed to the bullish sentiment. A report in The Wall Street Journal claims that the New York-based company will sell a stake of itself for a $5 billion cash injection from Singapore’s state investment company.