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Stocks opened in the green this morning and have held their own through Thursday afternoon on news that Wells Fargo issued a surprise profit announcement.
At 12:25 pm ET, the Russell 2000 (NYSE:IWM) is up 18.34, or 2.64%, at 460.46, while the Dow is up 2.22% and the S&P 500 is up 2.53%.
New employment data out today did little tamper the strong rally. New jobless claims fell more than expected to 654,000, while continuing claims set an 11th straight record. The total number of laid-off Americans receiving unemployment rose to 5.84 million, from 5.75 million, the most on record since 1967.
Small-cap A-Power Energy Generation Systems (Nasdaq:APWR) is up a whopping 33% after reporting a surge in Q4 profits. Cardiome Pharma (Nasdaq:CRME) is also up 24% after announcing a licensing agreement for Vernakalant, an investigational candidate for the treatment of atrial fibrillation.
******The minutes from the last FOMC meeting were released Wednesday. You might recall that was the meeting where Fed Chairman Ben Bernanke announced that the Federal Reserve would start buying $1.13 trillion worth of Treasury bills, corporate bonds and consumer debt.
Bernanke didn’t say at the time he was proposing the biggest Fed balance sheet expansion in history, but the members of the Fed lowered their estimates for economic recovery significantly.
The Fed had expected growth to return in the second half of this year and unemployment to top out around 8.8%. At the last meeting, dismal numbers from the start of 2009 prompted recovery expectations to be pushed into 2010, along with upward adjustments in unemployment number expectations.
It makes sense that the Fed took a more negative view of the economy. Why else would it take such a radical step as the balance sheet expansion? And I’ve been saying all along that unemployment will hit double digits before this recession is over.
What is interesting is what the Fed will say next. Bernanke has made some bullish comments over the last few weeks—comments that are somewhat contrary to the minutes from the last FOMC meeting. Perhaps Bernanake was just talking the market up? Or maybe the Fed overreacted to the dismal January numbers?
*****I like to use oil prices as a gauge for economic recovery expectations. And with oil locked into the $50 per barrel area, the market’s expectation seems to mirror the Fed’s: the economy may have seen the worst, but it’s not improving quickly.
Crude inventories are growing. Currently we have 15% more than last year. And while gasoline use is down from last year, it’s on the rise. Analysts are expecting relatively low prices to encourage more driving this summer, which, of course, would cause prices to rise.
Still, there is anecdotal evidence that Americans are spending a bit more money. Bed Bath and Beyond (Nasdaq:BBBY) and restaurant Ruby Tuesday (NYSE:RT) put up better-than-expected earnings numbers yesterday. Ruby Tuesday did especially well: its stock jumped 55% Wednesday.
Never underestimate the American consumer …
*****Wells Fargo (NYSE:WFC) is up 33% this morning on an earnings blowout. That’s good for stocks in general, but don’t forget, it takes money to make money and Wells got $25 billion in TARP money.
No doubt that TARP money helped Wells Fargo. But the market likes it and that’s what’s important now.
Also, bullish news should be good for oil prices. All the oil stock from the Special “Oil Shock” issue of SmallCapInvestor PRO are showing gains and should have more coming. Click HERE for details on these stocks and coming “Oil Shock” profits.
*****As always, I want to hear your questions, comments and jokes. Email me at editorial@247investor.com.
Have a great Easter weekend, I’ll talk to you on Monday.
Small-cap stocks wasted no time validating Friday’s big breakout move, scorching the bears with back-to-back big gains as the inflation picture brightened and the U.S. dollar remained in rally mode. The Russell 2000 (NYSE:IWM) closed up 16.76, or 2.28% at 751.06, notching consecutive daily gains of more than 2% for the first time all year.
Small caps were noticeably strong relative to other large-cap index products, with the percentage gain in the Russell more than double what was generated in the Nasdaq 100, S&P 500 or Dow. “I think small caps are strong relative to other products amid asset shifts. The drop in commodities and investors warming up to equities is helping the small-cap sector,” Nick Kalivas, vice president, financial research with MF Global, told SmallCapInvestor.com in an email interview.
“The action in the small cap sector is a positive for the entire market. I also think that overseas growth is looking relatively weak and this may be causing investors to feel more comfortable with small caps since large corporations have more international exposure,” Kalivas said.
Crude oil prices slumped once again Monday, slipping some $0.75 a barrel toward $114.45 as concerns about global demand overwhelmed jitters about the Russia/Georgia conflict potentially hampering transport. Commodity inflation has been slashed in recent weeks, with crude oil down more than 20% from the highs; today that chorus played out in the metals markets, with silver tumbling 4%, gold off 4% and even copper down 1%.
“I think the drop in commodities helped the market rally today and that some investors are feeling the need to be invested basis the drop in raw material costs. The drop in crude has become more believable and has forced money into the market,” Kalivas said.
Part of that story in commodities is closely tied to action in the U.S. dollar, as most commodity markets are priced in dollar terms (crude oil included) and when the greenback strengthens, demand and pricing structure for commodities can slip. During today’s action, the dollar remained on a serious roll against the euro, surging another 0.7%, or some 100 basis points, to the highest level since late February. The dollar was down a touch vs. the yen, but has room for a breather consolidation after scampering to 7-month highs last week.
Money flow clearly favored equities. In addition to the slide in energy and metals, the yield on the benchmark 10-year Treasury note jumped nearly 2%. There is a growing sense among traders that a stronger tone in the U.S. dollar will attract foreign investment in stocks and also outflow from “safe-haven” types of investments like bonds and notes. At the same time, the supposed unraveling of the long commodity/short dollar trade could also magnify shifts in those markets.
Retailer shares were on the rise Monday, continuing to bask in the glow of slumping energy costs, which they hope will transpire to consumer dollars spent in the store instead of at the gas pump. The S&P Retail Index jumped 4.5%, and among broad market sectors, Internet retail, department stores, general merchandise stores and specialty stores were among the best performers. Other sectors showing gains today included tire and rubber and home improvement. Investors shunned commodity themes, with coal, gold, steel and metals all taking a beating.
Individual small-caps of note included U.S. Concrete Inc. (Nasdaq:RMIX), which rallied 22%. Willis Lease Finance Corp. (Nasdaq:WLFC), jumped 22% on solid earnings news and Beazer Homes USA Inc. (NYSE:BZH) was up 20%, also tied to earnings results. On the downside, Airvana Inc. (Nasdaq:AIRV) shed 14% and Cardiome Pharma Corp. (Nasdaq:CRME) was off 20%.
Looking to Tuesday’s session, the international trade report in the morning ahead of the stock market open could be of interest to equity traders. Although this data often sparks a big response in foreign exchange trading, it seldom captures much attention in stocks, but with the recent focus on the U.S. dollar the release will likely be watched. It’s worth noting that the recent rally in small-caps has been highly correlated with the rally in the U.S. dollar, but momentum readings in FX markets are at extreme levels into Tuesday’s trade data.
From a charting perspective, the Russell basically filled the upside target on Friday’s breakout through key resistance at 726. The measuring target of that breakout was 32 handles, which corresponded to 758 and the market stalled out today just above 757. Still, momentum is clearly with the bulls, and the market now eyes a retest of the early June peak around 763. On the downside, it would take a slide back below 726 to suggest that this latest leg up was nothing but a huge false move; on a more realistic short-term basis, support is at 742 and 734.
Small-cap stocks hovered near steady levels in choppy morning action, with support from last week’s impressive rally countered by profit-taking and unease toward the crude oil market. At 10:02 a.m. ET, the Russell 2000 (NYSE:IWM) was up 1.43, or 0.20% at 735.73.
Crude oil prices backed off the overnight highs into the stock market open, but remain in positive territory as traders were concerned that the military conflict between Russia and Georgia could disrupt oil transport through the Caspian region. Still, a mild upside push in crude oil this morning hardly takes the shine off last week’s collapse in energy prices, which highlighted a welcome pullback on the commodity inflation front.
A big part of last week’s bullish story revolved around a stunning appreciation in the U.S. dollar, which exploded against both the euro and the yen, reaching multi-month highs against worldwide currency products in the process. This morning, the greenback was tame, basically flat vs. the euro, and down about 0.3% against the yen.
Without any major economic data on the docket today, stock market investors should be free to focus on company news, macro trends and gyrations in commodities.
In China, stock prices took a 5.2% hit overnight, even though most of the Asia zone put together gains. Taiwan was up 1.6%, India up 2.2%, Japan up 1.9% and Australia up 0.8%. China assets have been struggling into the Olympics, with the Wisdom Tree Dreyfus Chinese yuan fund tumbling 2.1% since mid-July.
Among broad market sectors this morning, food distributors were on the rise, as were Internet retailers, tire and rubber firms, department stores and wireless telecoms. On the downside were fertilizer stocks, and metal and mining stocks. Industrial gases, steel, coal and aluminum shares were lower, continuing the trend from late last week.
Individual small-caps of note included AgFeed Industries Inc. (Nasdaq:FEED), which jumped 16% on strong quarterly earnings. Clear Channel Outdoor Holdings Inc. (NYSE:CCO) was up 10%, also lifted by earnings news. BMP Sunstone Corp. (Nasdaq:BJGP) rallied 10% following decent quarterly results. On the downside, Cardiome Pharma Corp. (Nasdaq:CRME), tumbled 30%, perhaps tied to FDA findings for a heart drug. Sterling Construction Co. Inc. (Nasdaq:STRL), was down 23% on sluggish earnings news.
As the day moves on, it will be important for small-caps to hold pullbacks above chart support near 726. If that point is violated with conviction, it would jeopardize the validity of last week’s upside breakout. Key support below 726 it at 720.50. On the upside, resistance for today is at 742 and 748. The eventual upside target drawn off Friday’s breakout is at 758.
Qiao Xing Universal Telephone Inc (Nasdaq:XING), Cardiome Pharma Corp (Nasdaq:CRME) and Stewart Enterprises Inc (Nasdaq:STEI) are among the biggest percentage gainers in Monday's trading among companies with market capitalizations under $1 billion.
Also included among the results: Canadian Solar Inc (Nasdaq:CSIQ), Berkshire Bancorp Inc (Nasdaq:BERK), Brookfield Homes Corp (Nasdaq:BHS), CSG Systems International Inc (Nasdaq:CSGS), Qiao Xing Mobile Communication Co Ltd (Nasdaq:QXM) and China Architectural Engineering Inc (Nasdaq:CAEI).
Here are the biggest percentage gainers among small caps:
Small-cap stocks dipped into the red about 30 minutes after opening solidly higher, pulled down by ongoing jitters in the financial arena despite hope stirred by a Treasury Department plan to help shore up troubled government-sponsored mortgage giants Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE). At 10:00 a.m. ET, the Russell 2000 (NYSE:IWM) was down 3.73, or 0.55%, at 671.22.
The rescue proposal for GSEs was a scenario that reminded many investors of the stock market bottom that accompanied the bailout of Bear Stearns. There was a hope among many that the government would ensure the health of FNM and FRE, a calming influence in the wake of last week’s failure at IndyMac (NYSE:IMB), which became the third largest banking failure in U.S. history when the bank could not cover a run by depositors. Shortly after the open, FNM shares were up 22%, while FRE stock was up 17%. The advance in GSEs was expected to provide a lift to the overall financial sector, but that wasn’t playing out in early trading today.
Anheuser-Busch Co. (NYSE:BUD) announced that it would embrace a takeover from Belgian brewer InBev NV for approximately $52 billion, which is yet another large M&A deal put together in recent days. Merger activity typically creates bullish momentum among investors, and if there are deals to be done in large caps, then there are also bargains to be found in the small-cap arena. BUD shares were up only 1.2% shortly after the open as this takeover has been in the news and priced into the stock for weeks now.
The overnight bounce in U.S. equities pulled the greenback along for the ride, halting a dramatic slide in the buck that hit a crescendo late last week as the GSE crisis spiked. Shortly after the open, the dollar was up 0.2% against the yen, and almost 0.5% versus the euro, but those gains were trimmed away within 30 minutes after the stock market open.
To start the week, stocks opened higher, the dollar was firm, and even energy prices were taking a breather from the dramatic upward thrust seen late last week. Crude oil prices were lower overnight, but clawed back up to flat levels, with pressure from the firm dollar countered by a strike in Brazil. Also on the commodity front, grains futures were called sharply lower this morning. Despite the preponderance of supportive news early on, the market clearly was leery of the staying power of any rally, as small-cap shares once again paced the decline into negative territory this morning.
Broad market sectors on the rise were highlighted by thrifts and mortgage finance firms. Also on the rise were apparel and retail stocks, homebuilding shares and railroads. On the downside, environmental services, automobile manufacturers, gold and refining stocks were attracting sellers.
Individual small caps of note included Cardiome Pharma Corp. (Nasdaq:CRME), which gapped higher, climbing to an eight-month peak on a positive clinical trial. Qiao Xing Universal Telephone Inc. (Nasdaq:XING) jumped 21% on earnings-related news after hitting fresh 52-week lows last week. On the downside, a list of percentage losers was dominated by small banks and financial firms.
As the day progresses, it will be interesting to see if the bulls can sustain the opening enthusiasm. There was some concern that the planned “bailout” of GSEs is only a temporary band-aid on the troubled financial system. The market also faces quite a bit of volatility risk Tuesday morning in the form of PPI data, retail sales numbers, the N.Y. Manufacturing Survey and Senate testimony about the economy and monetary policy from Federal Reserve Chairman Ben Bernanke. With all of those potentially big market moving events hanging over things into Tuesday, it could create some choppy, position-evening activity later today.
Also, on the chart front, it will be important for any pullback this week to be contained above 660. A breach of that area would suggest that a retest of last week’s lows — and probably the March lows — are in the cards. Looking at short-term action for today, support is at 669, then at 661. Meanwhile, resistance comes into play at 684, then at 690.
Cardiome Pharma Corp (Nasdaq:CRME), Canadian Solar Inc (Nasdaq:CSIQ) and Solarfun Power Holdings Co Ltd (Nasdaq:SOLF) are among the most actively traded companies in Monday's trading among companies with market capitalizations under $1 billion.
Also included among the results: Evergreen Solar Inc (Nasdaq:ESLR), Ares Capital Corp (Nasdaq:ARCC), A Power Energy Generation Systems Ltd (Nasdaq:APWR), Crocs Inc (Nasdaq:CROX), China Sunergy Co Ltd (Nasdaq:CSUN) and GeoResources Inc (Nasdaq:GEOI).
Here are the most actively traded companies among small caps:
Cardiome Pharma Corp. (Nasdaq: CRME) shares are up more than 30% in pre-market trading today after the company’s early report of positive clinical results from its Phase 2b study of vernakalant, a drug used to treat atrial fibrillation. The Canada-based drug research and development company said oral vernakalant was well-tolerated in the population studied and that the 500mg dose decreased the rate of atrial fibrillation relapse. Atrial fibrillation is a cardiovascular disorder that can cause blood clots or strokes.
Ahead of today’s opening, shares of Cardiome Pharma are at $10.85, up $2.41 from Friday’s close. During the past year, the stock has ranged from $5.78 to $12.62.
For detailed price information and recent news stories about Cardiome Pharma Corp., click CRME.
The Russell 2000 (NYSE:IWM) declined as news of an emergency sale of Bear Stearns spread fears of financial turmoil. The small-cap index fell 12.42 points, or 1.87%, to 650.48. The Dow Jones Industrial Average (INDU) gained 21.16 points, or 0.18%, to 11,972.25.
On a year-to-date basis, the Russell 2000 has shed 15.08%, while the Dow is down 9.74% and the S&P 500 has retreated 13.06%.
Stocks small and large opened significantly lower on news that investment bank JPMorgan Chase & Co. (NYSE:JPM) has purchased Bear Stearns (NYSE:BSC) for just $2 per share, according to an announcement on Sunday.
The buyout was unprecedented, as the U.S. Federal Reserve gave JPMorgan $30 billion in special financing to complete the deal and prevent further financial turmoil. Shares of Bear Stearns were worth over $170 a year ago, but the company was heavily involved in securities backed by subprime mortgages and was dealt a lethal blow by the housing downturn.
The Fed also lowered its discount rate, the rate at which it lends funds to commercial banks, to 3.25% from 3.50%. The central bank will hold a regularly scheduled policy meeting on Tuesday, with investors expecting a steep cut in its target federal funds rate.
The Russell 2000 dropped out of the gate, falling to a session low of about 646 within minutes of the opening bell. From there the index traded choppy but was firmly in the red. Meanwhile, a late rally lifted the Dow into positive territory.
Predictably, shares of financial services companies were the worst sector performers. In turn, that affected the stock of small-cap TradeStation Group, Inc. (Nasdaq:TRAD), which provides software for online trading. Shares declined 8%.
Elsewhere, Penson Worldwide Inc. (Nasdaq:PNSN), which provides technology for the processing of securities and futures, saw its shares drop more than 20% even though the Dallas, Texas-based company insisted that it has no exposure to commodities broker MF Global Ltd. (NYSE:MF). There’s speculation that MF Global, a broker of exchange-listed futures and options whose stock fell 65%, is facing a shortage of funds.
Here are the day’s biggest percentage gainers and losers, along with top volume leaders, among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• I-trax Inc. (DMX), up 34% to $5.23 on news it is being purchased by Walgreen Co. (NYSE: WAG) for $278 million in cash.
• Cardiome Pharma Corp. (CRME), up 31% to $8.15 on news a successful drug trial.
• Trubion Pharmaceuticals, Inc. (TRBN), up 19% to $9.84.
Biggest percentage losers:
• FCStone Group, Inc. (FCSX), down 41% to $21.44.
• National Financial Partners Corp. (NFP), down 24% to $17.14.
• Boston Private Financial Holdings, Inc. (BPFH), down 24% to $10.31.
Volume leaders:
• I-trax Inc. (DMX) 9,258,300 shares traded.
• Cardiome Pharma Corp. (CRME) 7,527,300 shares traded.
• FCStone Group, Inc. (FCSX) 6,105,700 shares traded.
The day saw 4 small-cap stocks set 52-week lows, while 235 small caps established a 52-week high.
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| tags: Russell 2000, NASDAQGM:CRME, NYSE:NFP, NYSE:WAG, NASDAQGS:PNSN, NYSE:JPM, NASDAQGS:BPFH, NYSE:MF, NYSEARCA:IWM, NASDAQGS:TRAD, NASDAQGM:TRBN, :BSC, :INDU, :DMX, :FCSX
The Russell 2000 (NYSE: IWM) futures have plunged and the small-cap index will open in negative territory.
Futures are lower and investors are nervous following news that troubled investment bank Bear Stearns (NYSE: BSC) has been sold for just $2 per share. A year ago the New York-based company, which had been severely affected by the meltdown in the subprime mortgage sector, was worth over $170 per share.
There are fears of a domino affect that could spread the pain to other investment banks and financial institutions.
The U.S. Federal Reserve responded on Sunday by lowering its discount rate, the rate at which commercial banks borrow from the Fed, to 3.25% from 3.50%.
The Russell 2000 tumbled again Friday, capping an up-and-down week that ended only fractionally higher than where it began. On Friday, the index was down 16.81, or 2.47%, to 662.90. Look for support today just below the market at 660, while critical support remains along the 650 zone. On the upside, resistance is at 668, then a vacuum up to 678 and 684.
There could be some morning volatility into the opening. The 9:15 a.m. Industrial Production data could introduce some volatility into the mix.
Here are the biggest percentage gainers and losers in pre-market trading among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• Cardiome Pharma Corp. (CRME), up 30% on news of a successful drug trial.
• BladeLogic Inc. (BLOG), up 15% on news it will be purchased by BMC Software (BMC) for about $800 million.
• Medivation Inc. (MDVN), up 11%.
Biggest percentage losers:
• Transition Therapeutics Inc. ( TTHI), down 10%.
• James River Coal Co. ( JRCC), down 10%.
• TBS International Ltd. ( TBSI), down 9%.
Kevin Pendley contributed to this report.
Cardiovascular drug development company Cardiome Pharma Corp. (Nasdaq: CRME) this morning reported positive results for its phase 2 clinical trial of vernakalant (oral) when tested on the atrial fibrillation population. Shares surged 28.2%, or $1.76, to $8 in pre-market trading.
For detailed price information and recent news stories about Cardiome Pharma, click CRME.
Cardiome Pharma Corp. (Nasdaq: CRME), VASCO Data Security International Inc. (Nasdaq: VDSI) and A-Power Energy Generation Systems, Ltd. (Nasdaq: APWR) are among the most actively traded companies in Monday's pre-market trading among those with market capitalizations under $750 million.
Here are the most actively traded small-cap companies in Monday's pre-market trading:
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The Russell 2000 (NYSE: IWM) futures are a hair higher and the small-cap index will probably open with a small rise.
Stocks small and large are poised for a moderately bullish opening on momentum following Tuesday’s move by the U.S. Federal Reserve to make up to $200 billion in expanded loans to financial institutions in an effort to ease the credit squeeze.
Small cap stocks took flight Tuesday, soaring 29.84, or 4.63% to 673.81, notching the largest one-day point gain of the year. The Russell 2000 climbed back above the 650-point level, and now needs to hold that zone to generate any bottoming patterns from here.
In today’s session, resistance should be seen at 680, 688 and 694. Meanwhile, support comes in at 668, 661 and then back down close to 650. There are no morning economic reports to navigate Wednesday, and the afternoon Treasury Budget report at 2:00 p.m. ET seldom has an impact on the stock market.
Here are the biggest percentage gainers and losers in pre-market trading among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• Third Wave Technologies, Inc. ( TWTI), up 40% on news of a successful medical test.
• Cardiome Pharma Corp. ( CRME), up 29%.
• China Fire & Security Group, Inc. ( CFSG), up 10%.
Biggest percentage losers:
• Progenics Pharmaceuticals Inc. ( PGNX), down 51% on news of a disappointing drug trial.
• DivX Inc. ( DIVX), down 28% on news of a disappointing first-quarter guidance.
• Park-Ohio Holdings Corp. ( SAIA), down 9% on news of a decline in fourth-quarter net income.
Kevin Pendley contributed to this report.
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.
Here are the day’s biggest percentage gainers and losers, along with top volume leaders, among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• China Shen Zhou Mining & Resources Inc. (SHZ), up 52% to $9.04.
• GTx, Inc. (GTXI), up 36% to $17.59 on news of positive results from a drug trial.
• Cardiome Pharma Corp. (CRME), up 26% to $7.70.
Biggest percentage losers:
• Michael Baker Corp. (BKR), down 24% to $27.57 on news it is being investigated for securities fraud.
• Atrion Corp. (ATRI), down 17% to $108.00 despite news of a rise in fourth-quarter earnings.
• Smith Micro Software, Inc. (SMSI), down 13% to $5.62 on news of an analyst downgrade.
Volume leaders:
• GTx, Inc. (GTXI) 7,540,600 shares traded.
• Pier 1 Imports, Inc. (PIR) 4,299,400 shares traded.
• Smith Micro Software, Inc. (SMSI) 4,100,700 shares traded.
The day saw 20 small-cap stocks set 52-week lows, while 16 small caps established a 52-week high.
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| tags: Russell 2000, AMEX:BKR, NASDAQGM:CRME, AMEX:SHZ, NYSE:PIR, NYSE:ABK, NASDAQGS:SMSI, NASDAQGM:GTXI, NYSEARCA:IWM, NASDAQGS:ATRI, :INDU, :MBIA
Cardiome Pharma Corp. (Nasdaq: CRME) and its co-development partner Astellas Pharma US, Inc. said late Tuesday night that the Cardiovascular and Renal Drugs Advisory Committee of the U.S. Food and Drug Administration has recommended that the FDA approve KYNAPID, a intravenous formulation of vernakalant hydrochloride, an investigational new drug for rapid conversion of acute atrial fibrillation.
Atrial fibrillation is abnormal heart rhythm.
Shares of Cardiome Pharma (CRME) climbed 9.07%, or $0.84, to $10.10 in pre-market trading. Shares of Cardiome Pharma have been trading in the range of $7.98 to $12.62 for the past 52 weeks.
The Russell 2000 (NYSE: IWM) ended the day in negative territory on news of economic data confirming a slowdown in growth. The small-cap index fell 1.43 points, or 0.18%, to 785.52. The Dow Jones Industrial Average ( INDU) moved up 5.69 points, or 0.04%, to 13,625.58.
On a year-to-date basis, the Russell 2000 is off 0.24%, while the Dow has added 9.23% and the S&P 500 has advanced 6.22%.
Nonfarm payroll employment increased 94,000 in November, the U.S. Labor Department reported. That’s below October’s slightly upwardly revised total of 170,000 but just above economists’ projections.
The employment gains were led by the service sector, while manufacturing and construction shed jobs. Overall, the unemployment rate stayed put at 4.7%.
“Employment is a lagging indicator,” said Arun Raha, vice president of Economic Research and Consulting for the North American operations of reinsurance company Swiss Re, in an email. “The November increase in jobs growth, far less than in October, is consistent with slowing growth.”
The same report also showed that average hourly earnings climbed 0.5% to $17.63. That’s an increase of 3.8% from a year earlier, suggesting that the tight labor market is not putting much pressure on wages.
Small-cap stocks opened in the green but fell soon after. Trading was choppy from that point on, with the Russell 2000 index generally staying in the red.
Meanwhile, a separate report released by Reuters/University of Michigan showed that an index of consumer sentiment fell to 76.1 in the November, the lowest level in two years. The figure for October was 80.9.
Investors saw the decline as a bearish sign, but Raha cautioned against reading too far into the statistics.
“Income growth is a better indicator of consumer spending than consumer sentiment,” Raha said. “However, now with personal income growth slowing, I expect consumer spending growth to slow.”
That would be bad for the economy, because consumption is about 70% of gross domestic product.
Looking ahead to next week, all eyes will be on the U.S. Federal Reserve, which will convene on Dec. 11 to decide on monetary policy. Many expect the Fed to lower the federal funds rate, the rate at which commercial banks make overnight loans to each other, from the current level of 4.5% in order to avert a sharp economic slowdown.
“Given the weakness in the economy and the ongoing issues with the availability of credit, the Fed is likely to cut rates,” said Raha. “Inflation is not an issue, since the weakness in growth is reducing inflationary pressures.”
Here are the day’s biggest percentage gainers and losers, along with top volume leaders, among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• IMAX Corp. ( IMAX), up 58% to $7.32 on news it will install 100 digital projection systems in AMC Entertainment Inc. theaters.
• ICO, Inc. ( ICOC), up 23% to $14.39 on news of higher fourth-quarter profit.
• Liquidity Services, Inc. ( LQDT), up 21% to $13.32 on news it forecasted first-quarter and fiscal 2008 earnings per share above analysts’ expectations.
Biggest percentage losers:
• Smith & Wesson Holding Corp. ( SWHC) down 29% to $7.08 on news an analyst reduced the stock’s target price.
• Cascade Corp. ( CAE) down 17% to $53.22 on news of third-quarter earnings below estimates.
• Palm, Inc. ( PALM), down 13% to $5.74 on news of a lowered second-quarter revenue outlook.
Volume leaders:
• Palm, Inc. ( PALM) 24,547,700 shares traded.
• Smith & Wesson Holding Corp. ( SWHC) 12,401,200 shares traded.
• Cardiome Pharma Corp. ( CRME) 9,957,100 shares traded after the U.S. Food and Drug Administration reviewed the company’s drug candidate.
The day saw 24 small-cap stocks set 52-week lows, while 17 small caps established 52-week highs.
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.
Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• Hoku Scientific Inc. (HOKU), up 37% on news it has signed a $306 million contract to supply polysilicon to Solarfun Power Holdings Co. Ltd. (SOLF).
• U.S. Shipping Partners L.P. (USS), up 18% on news that it expects to pay the $0.45 fourth-quarter distribution on its common units in full.
• China Fire & Security Group, Inc. (CFSG), up 13% on news it was awarded a $31 million contract.
Biggest percentage losers:
• Medivation Inc. (MDVN), down 13%. A company representative could not be reached for comment.
• Cardiome Pharma Corp. (CRME), down 10% on news that it will delay drug trial results.
• TechTarget Inc. (TTGT) down 10%. A company representative could not be reached for comment.
The Russell 2000 (NYSE: IWM) futures are little changed but the small-cap index might move up slightly.
Stocks posted large gains on Friday, when shoppers flocked to U.S. retailers for holiday shopping and post-Thanksgiving Day bargains. Sales on “Black Friday,” as it has come to be known, were 8.3% higher than a year ago, according to ShopperTrak, a provider of shopper traffic counting information software.
However, the National Retail Federation said that sales per individual shopper were down.
That tells us that the discounts offered by retailers succeeded in enticing more shoppers to visit the stores, but individual consumer spending was lower due to the effects of the slump in the U.S. housing sector, high energy prices and a credit squeeze.
No major economic releases are scheduled for today.
Here are the biggest percentage gainers and losers in pre-market trading among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• Cyclacel Pharmaceuticals Inc. (CYCC), up 9%.
• Wonder Auto Technology, Inc. (WATG), up 8% on news that the company expects annual profit to increase more than 60%.
• China Fire & Security Group, Inc. (CFSG), up 6% on news it was awarded a $31 million contract.
Biggest percentage losers:
• Cardiome Pharma Corp. (CRME), down 7% on news that it will delay drug trial results.
• NGAS Resources, Inc. (NGAS) down 0.2%.
• Radiation Therapy Services, Inc. (RTSX) down 0.1%.
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Wyatt Research was founded in 2001 as an investment research focused publisher of information for active individual investors. The company offers independent research and analysis of the financial markets, stocks, bonds, ETFs, and mutual funds to +250,000 individual investors through a variety of investment newsletters, trading alert services, and e-letters.
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