Tag - Efii

The Russell 2000 (NYSE: IWM) and the other major U.S. indices rallied and ended the day in the green on news that the Fed may move to lower interest rates. The small-cap index added 8.09 points, or 1.14%, to 720.21, its second consecutive rise. The Dow Jones Industrial Average (INDU) advanced 117.78 points, or 0.92%, to 12,853.09.

On a year-to-date basis, the Russell 2000 has retreated 5.98%, while the Dow is down 3.10% and the S&P 500 has shed 3.27%.

Stocks small and large began the day in negative territory but rallied in the second half of the session and closed with solid gains.

“In light of recent changes in the outlook for and the risks to growth, additional policy easing may well be necessary,” U.S. Federal Reserve chairman Ben Bernanke told an audience at the Women in Housing and Finance and Exchequer Club this afternoon.

Those words sparked speculation that the Fed is preparing to lower the federal funds rate at its two-day meeting starting Jan. 29. The bulls took charge of the session and pushed stocks higher.

The federal funds rate, the rate at which commercial banks make overnight loans to each other, currently stands at 4.25%.

Electronics For Imaging, Inc. (Nasdaq: EFII) shares are spiraling downward after the printer and print supply firm announced that its fourth-quarter results will be lower than analysts’ expectations. The Foster City, Calif.-based company said its fourth-quarter revenue was damaged by weak server demand and higher-than-anticipated operating expenses of about $72 million.

“We are very disappointed with the results of our Fiery segment, which were weak across all our OEM partners. We are implementing significant steps to align our spending with this lower revenue and will take a restructuring charge in Q1 to reflect our reduced cost structure,” CEO Guy Gecht said in a statement. “While it will take some time, we are committed to taking the necessary steps to regain our traditional levels of profitability and growth.”

The company projects fourth-quarter earnings in the range of $0.22 to $0.24 per share on revenue of approximately $152 million. Wall Street analysts, on average, expect earnings of $0.37 per share on $163.1 million in revenue.

In afternoon trading, EFII shares are plunging 32.24%, or $6.18, at $12.99. Over the last 52 weeks, shares have ranged from $12.35 to $30.20.

The Russell 2000 (NYSE: IWM) and the other major U.S. indices are posting gains on news of a possible interest rate cut. At 2:46 p.m. ET, the small-cap index had advanced 7.49 points, or 1.05%, to 719.61. The Dow Jones Industrial Average (INDU) was up 135.59 points, or 1.06%, to 12,870.90.

“In light of recent changes in the outlook for and the risks to growth, additional policy easing may well be necessary,” U.S. Federal Reserve chairman Ben Bernanke told an audience at the Women in Housing and Finance and Exchequer Club this afternoon.

Those comments sent stocks rising and fueled speculation that the Fed is considering lowering the federal funds rate. But the bullish mood did not last and within an hour small-cap stocks were back down to their starting level.

Blame the bearish mood on the uncertain economic environment.

The day began with news from U.S. retailers that December sales were weak, suggesting that consumer spending is slowing. That would be a negative development, since consumption is about 70% of gross domestic product.

Economic growth is already being weighed down by the slump in the housing sector and higher energy costs.

The Russell 2000 (NYSE: IWM) and the other major U.S. indices are posting modest declines on news of poor December retail sales.
 
At 10:57 a.m. ET, the small-cap index was down 4.72 points, or 0.66%, to 707.40. The Dow Jones Industrial Average (INDU) had lost 29.67 points, or 0.23%, to 12,705.64.

Small-cap stocks started the day in negative territory but quickly recovered as investors apparently weighed news of disappointing December retail sales against news of a government report that showed an unexpected decline in weekly jobless claims.

The bearish pre-market mood was due to news of weak December sales at the major U.S. retailers. The main culprits appear to be the early Thanksgiving holiday, which moved some shopping days to November, as well as the deep discounts that many retailers offered to lure in shoppers.

Small-cap retailers also failed to impress, with music and apparel seller Hot Topic, Inc. (Nasdaq: HOTT) reporting that December same-store sales dropped 6.2%, leading the company to lower its fourth-quarter earnings guidance.

Similarly, Watsonville, Calif.-based boating supply retailer West Marine, Inc. (Nasdaq: WMAR) announced fourth-quarter results that disappointed analysts, while Cost Plus, Inc. (Nasdaq: CPWM) said that holiday same-store sales declined.

On the bright side, apparel retailer Eddie Bauer Holdings, Inc. (Nasdaq: EBHI) announced that fourth-quarter same-store revenue rose 4.8%.