Tag - Dow

The Russell 2000 (NYSE: IWM) and the Dow (INDU) are rallying after Merrill Lynch confirmed it will receive a cash injection from Singapore's state investment company and that the financial power house sold most of its commercial finance business.

At 11:02 a.m. ET, the small-cap index had added 4.87 points, or 0.62%, to 790.47. The Dow was up 75.98 points, or 0.56%, to 13,526.63.

Merrill, the world's largest brokerage firm, said in a statement today that it will receive a as much as $5 billion from Singapore’s Temasek and separately that New York- based Davis Selected Advisors LP will purchase a $1.2 billion stake.

The investments in Merrill are welcome news for jittery investors after the financial powerhouse clocked its biggest loss in its 93-year history in its latest quarter on account of bad bets on mortgage-backed securities.

Separately, Merrill also reported it will sell most of its commercial finance business to General Electric Co.'s finance arm for $10 billion in assets.

The Russell 2000 (NYSE: IWM) and the Dow (INDU) are below the flat line after two days of strong gains.

At 10:38 a.m. ET, the small-cap index had lost 3.69 points, or 0.45%, to 813.71. The Dow Jones Industrial Average had shed 24.80 points, or 0.18%, to 13,790.76.

Speaking to Congress this morning, U.S. Federal Reserve Chairman Ben Bernanke told lawmakers that the recent financial turbulence stems from the troubled subprime mortgage sector, “but the resulting global financial losses have far exceeded even the most pessimistic estimates of the credit losses on these loans.”

The result, Bernanke said, is that “recent developments in financial markets have increased the uncertainty surrounding the economic outlook.”

Nevertheless, he said the overall financial system remains strong.

News of those remarks cast a dark cloud over Wall Street and stocks fell out of the gate, since recovering some of their losses.

Contributing to the bearish sentiment this morning, financial services giant Bear Stearns Companies Inc. (NYSE: BSC) reported that its profit fell a whopping 61% in the third quarter due to its investment in securities backed by subprime mortgages, marking the company’s worst quarterly performance since 2006.

On the other hand, Goldman Sachs Group, Inc. (NYSE: GS) announced that its quarterly earnings soared 79%, easily outpacing Wall Street’s projections. Profit for the three months ended Aug. 31 was $2.85 billion, or $6.13 per share, while analysts had forecasted a profit of $4.35 per share. The New York-based investment bank had a net income of $1.55 billion, or $3.26 per share, a year earlier.

In economic news, the number of American workers filing for unemployment benefits fell to the lowest level in seven weeks, announced the U.S. Labor Department before the start of trading. Initial jobless claims for the week ended Sept. 15 fell 9,000 to 311,000, while economists were expecting claims to stay at their upwardly revised previous level of 320,000.

The four-week average dipped to 320,750, from 324,250.

The labor market has come in focus as fears of an economic slowdown have increased in the past few weeks, but today’s numbers show an unexpected improvement.

Overseas, Japan’s Nikkei 225 added a minuscule 0.2%, while in London the FTSE 100 let go 0.6%.

Elsewhere, a Philadelphia-area manufacturing survey will be coming out later today.

The Russell 2000 (NYSE: IWM) and the Dow moved up today despite news of a smaller-than-expected increase in August retail sales and generally gloomy reports about the U.S. economy. The small-cap index climbed 3.14 points, or 0.40%, to 783.49. The Dow Jones Industrial Average (INDU) closed up 17.64 points, or 0.13%, to 13,442.52.

This week the small-cap Russell 2000 rose four out of five days, gaining 7.7 points, or 0.99%. The Dow added 329.14 points, or 2.5%.

Stocks began the day lower following news that August retail sales posted a smaller-than-expected increase of 0.3%, according to the U.S. Census Bureau.

Total retail sales rose 0.3%, following an upwardly revised increase of 0.5% in July. The increase was below the projected rise of 0.4% and was largely attributed to strong automobile sales.

Sales of motor vehicles and automotive parts jumped 2.8% to $77.1 billion, compared with $75 billion in July.

Excluding autos, retail sales tumbled 0.4% to $300.49 billion, compared with $301.56 billion in the previous month. Economists were anticipating an increase 0.2%.

Small-cap stocks joined the party along with the Dow (INDU), S&P 500 (NYSE: IVV) and Nasdaq (LN: Q500) to record highs (albeit a day late), proving that Friday the 13th wasn’t so scary after all. For now, the trend remains toward higher prices. If those caught on the short side of this market are also tight on equity, then the move up tends to be exacerbated as they pay through the nose to unload losing trades. It’s worth noting that last week’s charge to record highs included a gap higher open on Thursday – as I’ve said in the past, trading in the direction of a morning gap that is not quickly filled often becomes a big short-term winning trade.

Looking ahead to this week, the big issue right now is to make sure that the Russell 2000 (NYSE: IWM) does NOT set up a double top on the recent highs. Although the index made a new historic peak on Friday, it was only by a few “handles” over the previous highs in late May/early June, and the market needs to avoid turning south off that zone once again to prove that seller resolve in the 850-855 zone is not greater than buyer exuberance.

As you can see on the attached charts, there is a minor divergence between price and momentum peaks on this latest push higher. Similar divergent behavior in recent months resulted in short-term declines, but was not a long-lasting warning signal. Of greater concern is that weekly charts sport a similar divergence, and on those charts, this kind of divergence can be a topping signal.

April 19 (SmallCapInvestor.com) – The Dow closed at a record high for the second day in a row despite fears of overheating in China, while the Russell posted another loss.  Among small caps, a downwardly revised earnings forecast hurt shares of KVH Industries, Inc. (Nasdaq: KVHI) while shares of Maxco Inc. (Nasdaq: MAXC) will be delisted.

The Russell 2000 lost for the third consecutive day, dropping 5.06 points, or 0.61 percent, to 819.32, after setting a record high of 831.44 on Monday.  The Dow Jones Industrial Average improved on Thursday’s record close, adding 4.79 points, or 0.04 percent, to 12,808.63.

April 19 (SmallCapInvestor.com) –The Dow is tiptoeing to another record close in midday trading on news of strong earnings, while the Russell 2000 is languishing in negative territory.  Among small caps, shares of Labor Ready, Inc. (NYSE: LRW) are up on news of better-than-expected first quarter earnings, while Decorize, Inc. (AMEX: DCZ) faces delisting.

At 1:47 PM the Russell 2000 had lost 2.21 points, or 0.27 percent, to 822.17.  The Dow Jones Industrial Average was up 15.35 points, or 0.12 percent, to 12,819.19.

April 18 (SmallCapInvestor.com) –The Dow is above its record close from two months ago in midday trading today, while the Russell 2000 is slightly lower. Shares of Lifecore Biomedical, Inc. (Nasdaq: LCBM) are falling on news of a lowered earnings projections, and holding company Dearborn Bancorp, Inc. (Nasdaq: DEAR) is down on weak quarterly earnings.

At 1:39 PM the Russell 2000 had lost 3.96 points, or 0.48 percent, to 825.00.  The Dow Jones Industrial Average was up 14.46 points, or 0.11 percent, to 12,787.50, past its closing record of 12,786.44.