Tag - Dds

Recession be damned, Americans appear determined to spend what they can this holiday season.

MarketWatch reports that the National Retail Federation survey indicated that the number of shoppers jumped 8.7 percent over the four day holiday weekend, and that average spending rose 6.4 percent.

In a fitting finish to an exasperating day, small-cap stocks collapsed in the final half-hour of trading as worries about a recession and tight credit lines clouded exuberance tied to a dramatic coordinated global rate cut ahead of this morning’s stock market open. The Russell 2000 (NYSE:IWM) closed down 12.39, or 2.22%, at 546.57, the lowest daily close since August 2004.

It was a turbulent session that saw the market sharply higher ahead of the open, sharply lower shortly after the open, solidly higher in mid-morning, sharply lower at midday, solidly higher with an hour to go, but then finally sinking back into a red sea by the close. For the year, the Russell is now down 28.6%, while the Dow is off 30.2% and the S&P 500 is down 32.9%. At the lows today, the Russell was down 37.1% from the all-time highs.

At approximately 7:00 a.m. ET this morning, the Federal Reserve slashed the target rate for fed funds to 1.5% from 2.0%, which marked the lowest level for fed funds since August 2004. At the same time, central bankers in England, Switzerland, Sweden and China also announced rate cuts, resulting in the first concerted international action on weak economic conditions since the 9/11 attacks seven years ago.

The market appeared to struggle mightily early today with whether or not the surprise global rate cut move was really enough to unclog credit lines and jolt the economy out of the grip of recession. For most of the day, the answer to those questions appeared to be “no.” However, tech stocks led the way back out of the midday slump, apparently driven by bargain hunting and by ideas that access to cheaper money would help investment in technology companies. The tech-laden Nasdaq 100 gave back a 4% afternoon rally by the close, but still managed to finish flat on the day, bouncing off five-year lows in the process. At the trough today, the Nasdaq 100 was down 42% from record highs, near levels consistent with previous recession . . .

Small-cap stocks continued to climb Thursday, powered by a solid performance in financial, retail and airline stocks, by yet another “good news” economic report and by a sudden downdraft in crude oil prices. The Russell 2000 (NYSE:IWM) gained 14.85, or 2.03%, to 747.79 and is now down 2.38% on the year.

Small caps were strong relative to the S&P 500 and also broke free of a close pattern they had been keeping with tech stocks. The S&P 500 was up 1.48% and is down 11.4% for 2008, while the Nasdaq was up 0.78% and is off 8.1% for the year. Meanwhile, the Dow was up 1.85% and is down 11.6% for the year.

On the financial front, investors continue to gain confidence in government-sponsored enterprises Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE), which has become a source of great relief for banks, insurance firms and a host of other financial shares. FNM rose another 22% today has recovered over 50% from last week’s lows when investors were concerned that all the share equity in GSEs would be rendered worthless. A shakeup in management at FNM and talk that the firm’s balance sheets were not as bleak as feared powered the latest recovery move today.

The ripple effect throughout financials was easy to see, with the Financial Select Sector SPDR Fund climbing 3.8% and the PHLX KBW Banking Index up 4.0%. Big-name firms such as Citigroup Inc. (NYSE:C) and Bank of America Corp. (NYSE:BAC) both registered gains in the 5% range.

Some of the bullish psychology for today’s action was tied to this morning’s upside surprise on the GDP report, which came in at 3.3%, well above the forecast for a rise of 2.7%. The GDP report was just the latest in a friendly string of data surprises this week, including consumer confidence Tuesday and durable goods Wednesday. On its own merit, second-quarter GDP is somewhat dated since we’re nearly two-thirds of the way through the third quarter, but when the market is rallying, it’s . . .

Small-cap stocks took it in the chin Wednesday, with retail stocks and financial shares falling out of favor with investors amid a gloomy economic environment and the ongoing credit crisis. The Russell 2000 (NYSE:IWM) lost 5.86, or 0.80%, to 730.71.

The S&P Retail Index crumbled nearly 2% to the second-lowest close since late March. Big-name department stores like Dillards (NYSE:DDS), JC Penney (NYSE:JCP), Nordstrom (NYSE:JWN), Kohls (NYSE:KSS), Macy’s (NYSE:M) and Sears (Nasdaq:SRLD) were all deep in the red

In the financial arena, the biggest percentage loser of the day was MF Global (NYSE:MF), the giant futures and commodities brokerage firm that was split off from Man Group last year. MF shares collapsed nearly 40%, shrinking its market cap down to about $945 million in the process. MF projected a significant decline in revenue and said it would raise $300 million to repay debt via $150 million in preference shares and another $150 million in convertible senior notes.

Although the steep freefall in MF shares was an attention grabber, the bears were active throughout the financial sector. In fact, late in the day seven of the top 10 percentage declines on the Nasdaq were either banks or financial firms. Tuesday’s slide in regional banks remained in play today, with Fifth Third Bancorp (Nasdaq:FITB) sinking nearly 20% after the firm said it would raise at least $2 billion in capital and slash dividends to help overcome credit losses.

The Dow slipped to the lowest daily close since mid-March, when the market was grappling with the collapse of Bear Stearns. For the recent move, the Dow peaked earlier than the Russell 2000, hitting a high on May 19 at 13,136. From the May 19 high to today’s low, the Dow is off 8.7%, while the Russell is only down 2.9% over that same time frame (although the Russell is off 4.8% from the early . . .