Tag - Enp

Small-cap stocks edged lower in a fairly weak start to this week’s trading, pulled down by worries about corporate profits as we enter the unofficial start of earnings season this afternoon. Energy and commodity stocks were a source of worry early today as crude oil futures extended the recent slide. At 9:57 a.m. ET, the Russell 2000 (NYSE:IWM) was down 5.31, or 1.10%, at 475.99.

Crude oil prices tumbled more than $2 a barrel into the U.S. stock market opening, which could pull down energy stocks. The dollar was firm against the euro this morning, which could also weigh on other commodity markets and stocks with close ties to physical markets.

Tying together the commodity and profit themes, Alcoa Inc. (NYSE:AA) kicks off the earnings season after the close today. The firm already announced plans to slash 13,500 jobs and reduce output and will release quarterly results after the close today.

Overseas markets were lower coming into today’s session, which likely weighed on the market as well. In European and Asian trading, bank stocks and chipmakers were taking a hit. Here in the U.S., investors will watch progress on a deal between Citigroup Inc. (NYSE:C) and Morgan Stanley (NYSE:MS), in which Citigroup plans to sell its Smith Barney brokerage unit to raise cash.

The market did take a hit on Friday and the news so far today was soft, but not overly surprising, which could make it difficult to attract fresh selling, especially ahead of a raft of economic numbers later this week. There was an acquisition deal involving a small-cap firm this morning, and when deals get done, it often stokes bullish enthusiasm, especially in the small-cap arena.

Advanced Medical Optics Inc. (NYSE:EYE) will be purchased by Abbot Laboratories Inc. (NYSE:ABT) for $1.4 billion, which sparked a big rise in EYE shares on the opening. EYE was up 144% on the news.

Other small caps on the move this morning included Satyam Computer Sevices Ltd. (NYSE:SAY), which was down 90% as the NYSE finally opened up trading on the embattled Indian outsourcer and the U.S. markets caught up with the . . .

The Russell 2000 (NYSE: IWM) and the Dow Jones Industrial Average (INDU) fell for the second consecutive day as economic reports and poor earnings made investors bearish. The small-cap index lost 10.87 points, or 1.39%, to 771.60. The Dow shed 120.96 points, or 0.91%, to 13,110.05.

On a year-to-date basis, the Russell 2000 has retreated 2.01%, while the Dow has risen 5.09% and the S&P 500 has added 2.44%.

The U.S. economy came into focus today when the Labor Department announced before the start of trading that its consumer price index increased 0.3% in October. The result was expected by economists and follows a similar rise in September.

Core prices, which exclude the volatile costs of food and energy, added 0.2%, the same as in September.

“Despite rising energy prices, inflation appears restrained,” said Arun Raha, vice president of Economic Research and Consulting for the North American operations of reinsurance company Swiss Re, in an email. “Looking ahead, there are two opposing forces at work with respect to inflation—on one hand we have high oil prices that can feed through to the core, and on the other we have weakening economic activity that softens prices.”

Consumer prices have advanced 3.5% on a year-over-year basis, while core prices have increased 2.2%. The U.S. Federal Reserve has said that it prefers core prices to stay in the range between 1% and 2%.

“The Fed needs to continue keeping a close watch on the situation,” Raha concluded.