Tag - Ggc

Stocks generally continued their upward trajectory and extended the rally today. The Dow closed up 33.63 points today to finish at 9,320.19; the Nasdaq finished up 2.70 points at 2,011.31; and the S&P 500 held over 1,000 to finished 1,005.61, up 2.98 points.

 

The Russell 2000 index finished up 4.38 point at 570.16.
 

Leading small-cap price gainers include Xerium Technologies (NYSE:XRM), up 33%; Georgia Gulf Corporation (NYSE:GGC) up 45%; Central Pacific Financial (NYSE:CPF) up 32%; and YRC Worldwide (Nasdaq:YRCW) up 30%.

 

Declining small-caps include WPT Enterprises (Nasdaq:WPTE) down 26%; The Phoenix Company (NYSE:PNX) down 19%; and Mellanox Technologies (Nasdaq:MLNX) down 17%.

 

*****Oil prices are slightly lower this morning. That should mean stocks will trade lower today as well. And while many are saying the fundamentals of this economic recovery do not support current prices for stocks or oil, I wouldn't get too excited about an imminent trade-worthy decline.

 

More likely, we will see any dip get bought by the bulls. And I doubt any dip will last for more than two days…

 

*****Sometimes, the financial markets can be very simpleminded--even downright dumb. And I believe now is one of those times. The federal government has committed to pouring as much cash into the economy as is necessary to keep prices from falling too much. And that may be all we need to know.

 

After all, banks can make money when they have the ability to borrow at 0.5% interest. They can make more money in fees when the government is sponsoring mortgage loan modifications. And when the government forced banks to raise more capital by selling stock, Goldman Sachs (NYSE:GS) may have made as much as $1 billion in profit from fees associated with secondary offerings.

 

Car companies and banks can make money from the Cash for Clunkers programs. Auto sales rose 13% in June, helped by this program. Heck, Ford (NYSE:F) posted its first rise in sales since 2007!

 

*****Some estimate that 40% of the world's wealth was lost in the wake of Lehman's collapse and the financial crisis. The only way to get that money back is to earn it. But companies aren't really earning money the old-fashioned way -- government policies are focused on allowing companies to do just that.

 

Sure, it's a form of trickle down economics. And while the long-term success may be questionable as there are always unintended consequences, make no mistake about the effect on the short-term. Assets are being reflated. Home values, stock prices, commodities - all can be expected to move higher.

 

*****Thanks to everyone who has sent in submissions for The Small Cap Investor: Secrets to Winning Big with Small Cap Stocks T-shirt contest. In case you don't know, my first book is coming out on September 14, 2009. As part of the marketing plan for my book, The Small Cap Investor: Secrets to Winning Big with Small Cap Stocks, I'm holding a T-shirt contest. I want you to be the one who comes with the slogan for The Small Cap Investor: Secrets to Winning Big with Small Cap Stocks T-shirt. 

 

Submissions have already been posted to the Small Cap Investor Facebook page and we're holding this contest open for just a little longer to get your idea. Post your submission on the Small Cap Investor page on Facebook

Small Cap Investor page on Facebook  send it to tshirt@smallcapinvestor.com. We're keeping this open until Sunday, August 9th.

 

Everyone who submits a T-shirt slogan will get a 30-day, 100% complimentary trial to my SmallCapInvestor PRO advisory service. The winner gets a one-year subscription to ALL of my advisory and trading services ($2,680 value), plus a signed copy of the book and three t-shirts. Voting on the slogan will begin shortly after the 9th.

 

*****The Managed America video conference is coming up next Monday, August 10 at 6:00 P.M. We'll cover the game plan for making profits in an America with sustained high unemployment, weak growth, weak banks, higher taxes, and excess government regulation. You don't want to miss this. It's free to attend and you can register HERE.

 

Ian Wyatt

Editor

Daily Profit

 

P.S. Tomorrow is NewsletterAdvisors.com Wednesday where we interview one of the country's top investment experts. We're fortunate to have Carla Pasternak of High-Yield Investing and High-Yield International, two of the leading publications for dividend and income investments. Don't miss tomorrow's edition of Daily Profit with our in-depth interview with Carla.

Stocks rallied today suggesting that investors sloughed off fears of a correction or at least pushed out the day of reckoning. The Dow closed up 83.51 to 9,154.23 after a major drop down during the last hour of trading. The Nasdaq closed up 16.54 to end the day at 1,984.30 and the S&P 500 closed up 11.60 to finish at 986.75 after and early session high of 996.68 had traders believing that 1,000 might be broken.

The Russell 2000 closed at 557.75, up 9.37.

Leading price gainers for small-cap today was Georgia Gulf Corporation (NYSE:GGC) up 119% after announcing it had cut its debt load by half. Other small-cap gainers include Valassis Communications (NYSE:VCI) up 30%; Brunswick Corporation (NYSE:BC) up 27%; and American Superconductor Corporation (Nasdaq:AMSC) up 23%.

Decliners in the small-cap space were lead by Inovio Biomedical Corporation (AMEX:INO) down 53% after announcing today that it had received commitments from institutional investors to purchase $30 million in securities. Other small-cap decliners include Lee Enterprises (NYSE:LEE) down 30%; Alliance Healthcare (NYSE:AIQ) down 30%; and icad (Nasdaq:ICAD) down 20%.

******Stocks have traded in a pretty tight range over the last several sessions. There's been an appearance of weakness, and some comments from talking heads that a correction is coming, or may have started. It's sure not looking that way today.

Stocks are big in the early going. The sell-off in China I mentioned the other day has reversed. All the talk of an imminent overheating of China's economy now sounds like a deliberate attempt to work stocks lower so dips could be bought.

There should be no doubt that games are being played right now. Shenanigans, as I like to call them. But it's also true that economic recovery is an unknown entity: we don't know what's going to happen, how robust the recovery is and what the upside may be. That's why the shenanigans work.

Just this morning, new jobless claims came in higher than expected. That's bad news. But stocks are up big. Many of the ongoing conditions of recession are being discounted because it's widely believed that the economy has bottomed. Some believe the recovery that's going on right now will show up as a surprise number for the third quarter GDP.

*****So that suggests that today's poor unemployment number will soon be a stabilizing, or even improving number. Yesterday's bad durable goods number will be the bottom of the cycle…

Is the market being set-up for a massive disappointment? You bet it is. Will that disappointment materialize? I don't know.

That leaves me, and other investors, in a difficult spot. So, I'm going to continue to do what I've been doing - buy quality stocks in the sectors that make sense, watch them like a hawk and take profits. That approach has worked extremely well in all of my advisory letters.

*****I haven't mentioned my Recovery Portfolio lately. I've added a couple stocks over the last few weeks and just closed a covered call trade on Chesapeake Energy (NYSE:CHK). We made 21% and 25% in four months on a very low risk investment. I'm lining up my next covered call trade, to learn more about Recovery Portfolio, click HERE.

*****SCI Daily readers are the best. Your response to the T-shirt contest I announced yesterday to get the word out on my first book, The Small Cap Investor: Secrets to Winning Big with Small Cap Stocks, was outstanding. And I didn't even give you all the details!

First of all, I neglected to include the link to the SmallCapInvestor Facebook page. Click this link to check it out.

I also didn't mention that everyone who submits a T-shirt slogan will get a 30-day, 100% complimentary trial to my SmallCapInvestor PRO advisory service. Or that the winner gets a one-year subscription to ALL of my advisory and trading services ($2,680 value), plus a signed copy of the book and three t-shirts.

And still, you stepped up to help. Thanks again for your overwhelming support.

I will be taking submissions for the T-shirt slogan until August 9, 2009. Submissions can be made at Facebook or via email (tshirt@smallcapinvestor.com). All email submissions will be posted on Facebook and that's where the voting will take place.

*****It's pretty clear now that the trends we've seen emerging from the financial crisis and recovery will be with us for a long time. I'm talking about high unemployment, higher taxes, a weak dollar, restrictive regulations, and potential inflation, just to name a few.

Clearly, these conditions will have a profound effect on your investments in the months and years ahead.

And because many of these conditions are a direct result of government bailouts, I'm calling the condition Managed America.

We've just completed the update to the Predictions 2009 special report (I mentioned it last week, click here if you need a copy). The report does a cursory review of the past few months and the investing strategy that made big gains for Top Stock Insights subscribers.

More importantly however, the report reveals our investing strategies for the remainder of 2009 and beyond, and explores my concept of Managed America and how you can still make profitable investments. The U.S. economy has changed and investors need to understand the changes in order to make the best investments.

To complement the report, I'm hosting a web video conference on Monday, August 10th at 6:00 p.m. to go over the major themes of Managed America and how you'll make profits from this new economic reality.

The event is free, but you do need to register for it. Click here for the free registration page now to make sure you're on the list to attend.

Best Regards,

Ian Wyatt
Editor
SCI Daily

Georgia Gulf Corp. (Nasdaq:GGC), Brunswick Corp. (Nasdaq:BC) and Quaker Chemical Corp. (Nasdaq:KWR) are among the biggest percentage gainers in Thursday's trading among companies with market capitalizations under $1 billion.

Also included among the results: West Marine Inc. (Nasdaq:WMAR), Sourcefire Inc. (Nasdaq:FIRE), Tenneco Inc. (Nasdaq:TEN), Callaway Golf Co. (Nasdaq:ELY), OfficeMax Inc. (Nasdaq:OMX) and Olympic Steel Inc. (Nasdaq:ZEUS).

THQ Inc. (Nasdaq:THQI), BTU International Inc. (Nasdaq:BTUI) and Washington Banking Co. (Nasdaq:WBCO) are among the biggest percentage losers in Wednesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Georgia Gulf Corp. (Nasdaq:GGC), Perry Ellis International Inc. (Nasdaq:PERY), A M Castle & Co. (Nasdaq:CAS), Timberland Co. (Nasdaq:TBL), Spartan Stores Inc. (Nasdaq:SPTN) and Epicor Software Corp. (Nasdaq:EPIC).

Small-cap stocks extended the morning slide into midday trading, as pressure from a weak economy continues to take a toll on commodity, retail and financial stocks, overshadowing even aggressive rate cuts out of Europe overnight. Today’s small-cap gainers are Lumber Liquidators' (NYSE:LL), Global Cash Access (NYSE:GCA) and American Equity's (NYSE:AEL).

Other Market Watch highlights today included:

• Thomson-Reuters October same-store sales index was off 0.7%, and they pegged today’s retail returns as the worst monthly results in a decade.  
• Energy exporters that depend on demand from big consumers were taking a beating, with the Energy Select Sector SPDR Fund down 5.5%. 
• The IMF said that developed economies were on track for a full-year contraction for the first time since World War II.  
• The malaise continued to bruise commodity markets, with crude oil prices tumbling toward $60 a barrel, or the lowest prices since March.  
• The Russell 2000 is down 2% in midday trading.  

Small Cap Gainers:

• Lumber Liquidators' income up 48% in Q3; shares soar 18%. See (NYSE:LL). 
•  Global Cash Access Holdings reports successful Q3 results; shares climb 25%. See (NYSE:GCA).  
• American Equity's Q3 2008 operating income increases 41%; shares pop over 33%. See (NYSE:AEL).   
• Global Crossing Ltd. rallied 19% as the IP solutions provider also got an earnings-related lift. See (Nasdaq:GLBC).
• Simcere Pharmaceutical Group reports rise in Q3 profit, reaffirms FY08guidance. Shares up 18%. See (NYSE:SCR).  

Small Cap Losers:

• LandAmerica dives 33% on delayed third-quarter earnings. See (NYSE:LFG).
• Georgia Gulf Corporation slips to loss in Q3; shares down 28%. See (NYSE:GGC).  
• SRA International down 26% on Cowen & Co. downgrade. See (NYSE:SRX).  
• Playboy Enterprises sees sharp ad sales drop, shares tumble 22%. See (NYSE:PLA).  

The Russell 2000 (NYSE: IWM) went through the roof today as a late rally in financial shares lifted all the major U.S. indices. The small-cap index advanced 21.86 points, or 3.26%, to 693.43. The Dow Jones Industrial Average (INDU) gained 298.98 points, or 2.50%, to 12,270.17.

On a year-to-date basis, the Russell 2000 has lost 9.48%, while the Dow has let go 7.50% and the S&P 500 is missing 8.84%.

Small-cap stocks outpaced their larger brothers today as speculation of more rate cuts fueled the late-session rally.

February fed funds futures overwhelmingly suggest that the U.S. Federal Reserve will vote to lower its target for the federal funds 0.75% during its two-day meeting starting Jan. 29. A reduction of at least 0.50% is seen as a sure bet.

On Tuesday, the Fed lowered the federal funds rate, the rate at which commercial banks make overnight loans to each other, to 3.50% from 4.25%.

Shares representing the financial sector were invigorated and freed themselves of the bears’ grasp. Among the few exceptions was consumer financial services provider First Cash Financial Services, Inc. (Nasdaq: FCFS), which issued a 2008 earnings guidance below analysts’ projections.

The Russell 2000 (NYSE: IWM) is falling on news of worse-than-expected earnings forecasts from major financial players. At 1:26 p.m. ET, the small-cap index had retreated 8.53 points, or 1.18%, to 711.68. The Dow Jones Industrial Average (INDU) was down 207.20 points, or 1.61%, to 12,645.89.

The bears are dominating trading as stocks small and large are losing ground on news that the strain from the problems in the subprime mortgage sector has spread.

Merrill Lynch & Co., Inc. (NYSE: MER), the world’s largest brokerage house, reported before the start of trading that it may incur $15 billion in losses from investments in securities backed by mortgage loans.

That’s more than twice what the New York-based company had initially projected and an indicator that the problems stemming from the stagnation in the U.S. housing market continue to ripple through financial markets.

More bearish news came from luxury jewelry seller Tiffany & Co. (NYSE: TIF), which lowered its guidance for the fiscal year, and credit card issuer American Express Co. (NYSE: AXP), which announced a fourth-quarter pretax charge of about $440 million due to slower spending by card members and an increase in delinquencies.

The American consumer is still spending money, but retail sales have slackened due to high energy costs.

The Russell 2000 (NYSE: IWM) closed in negative territory as investors digested news of economic reports. The small-cap index fell 8.54 points, or 1.13%, to 745.01. The Dow Jones Industrial Average (INDU) added 12.76 points, or 0.10%, to 13,056.72.

Small-cap stocks opened the session in positive territory but lost steam during the second half of trading and fell into the red.

The bullish pre-market mood was due to a report by Automatic Data Processing, Inc. (NYSE: ADP), which claimed that U.S. nonfarm private employment increased 40,000 in December. The provider of business outsourcing solutions attributed the rise to small- and medium-sized businesses, which added 75,000 jobs while larger companies cut 35,000.

The December figure was larger than forecasted but is almost three times below the average for three-month period from September through November.

A slowdown in employment growth is consistent with a slowdown in economic growth.

Breaking down the numbers, employment in the service-providing sector was up, while the goods-producing sector suffered its thirteenth consecutive monthly decline and manufacturing employment fell for the eighteenth consecutive month.

In other employment news, U.S. Labor Department reported that jobless claims for the week ended Dec. 29 fell 21,000 to 336,000 from the previous week’s upwardly revised figure of 357,000.

However, many consider the government’s statistics to be imprecise due to the distorting effects of the Christmas holiday, which decreased the time laid-off workers have to file for benefits.

The Russell 2000 (NYSE: IWM) slipped into negative territory while most of the other major U.S. indices remain in the green. At 2:32 p.m. ET, the small-cap index had lost 3.60 points, or 0.48%, to 749.95. The Dow Jones Industrial Average (INDU) was up 38.45 points, or 0.25%, to 13,082.41.

Small-cap stocks fell at about 1 p.m. ET, defying the modestly bullish mood that set over Wall Street following the release of jobs data.

A report by the Automatic Data Processing, Inc. (NYSE: ADP), a provider of business outsourcing solutions, showed that nonfarm private employment increased a more-than-expected 40,000 in December.

But there is still cause for concern, as the figure is about three times smaller than the monthly averages for the months of September through November.

Separately, the U.S. Labor Department reported that jobless claims for the week ended Dec. 29 fell 21,000 to 336,000 from the previous week’s upwardly revised total of 357,000.

The more stable four-week moving average was 343,750, a decrease of 750 from the previous week’s revised average of 344,500.

The Russell 2000 (NYSE: IWM) fell today on news that U.S. inflation increased more than expected in November. The small-cap index dropped 15.53 points, or 2.02%, to 753.93. The Dow Jones Industrial Average (INDU) lost 178.11 points, or 1.32%, to 13,339.85.

On a year-to-date basis, the Russell 2000 is down 4.25%, while the Dow has gained 6.94% and the S&P 500 has advanced 3.62%.

The consumer price index increased 0.8% in November, according to the U.S. Labor Department. That’s the biggest climb in more than two years and above economists’ projected rise of 0.6%.

Prices were up in every single category, with energy and transportation costs leading the way, posting increases of 5.7% and 2.9%, respectively.

Consumer prices moved up 0.3% in October.

During the first eleven months of 2007, the consumer price index rose at an annual rate of 4.2%, compared with an increase of 2.5% for all of 2006.

The core consumer price index, which factors out the cost of food and energy, gained 0.3% in November. The forecast called for an increase of 0.2%.

Georgia Gulf Corp. (NYSE: GGC) shares are dipping after Citigroup, Inc. (NYSE: C) lowered its price target to $9 from $12. Citigroup said the weak housing market is hurting Georgia Gulf’s earnings.

Citigroup changed its rating on the chemical company to “hold/speculative” from “hold/high risk.” The investment bank said Georgia Gulf’s material expenses have risen and are expected to continuing rising during December.

In a note to investors, Citigroup said Georgia Gulf is “in a tough spot” and if “the company violates its debt covenants this could further bring down its credit ratings.”

In today’s trading, GGC shares are down 14.06%, or $1.08, at $6.60. Over the last 52 weeks, shares have ranged from $6.16 to $21.90.

The Russell 2000 (NYSE: IWM) is posting losses on news that U.S. consumer prices rose more than expected in November.
 
At 10:47 a.m. ET, the small-cap index had dropped 4.08 points, or 0.53%, to 765.38. The Dow Jones Industrial Average (INDU) was off 50.56 points, or 0.37%, to 13,467.40.

High energy costs led to a jump in inflation in November, according to a report by the U.S. Labor Department before the start of trading.

The consumer price index increased 0.8% in November, above economists’ projected rise of 0.6%. That’s the biggest increase in over two years. Prices increased across the board, with energy leading the way with a 5.7% climb.

Consumer prices added 0.3% in October. Prices are up 4.3% from November 2006.

The core consumer price index, which factors out the cost of food and energy, gained 0.3%. The forecast called for an increase of 0.2%.

Core prices are up 2.3% from November 2006, while the U.S. Federal Reserve has said that it prefers core inflation to stay in the 1% to 2% range.

Georgia Gulf Corp. (NYSE: GGC), a major North American producer of the commodity plastic PVC, was upgraded to a “buy” rating from “neutral” by UBS based on an improved outlook for caustic pricing and the stock’s implied excess return of 26% versus the bank’s revised target price of $17.

UBS analyst Gregg Goodnight says the chlor-alkali market continues to show unexpected strength. According to Goodnight, in 2007, United States caustic exports are up 13% on a year-to-date basis, and should continue to remain firm in 2008.

For 2007, Goodnight said caustic soda has shown strength, which has been illustrated through three consecutive successful quarterly price increases totaling $110 per thousand short tons (ST). Goodnight said additionally, another increase of $30 per ST has been proposed for the fourth quarter and he said he believes that at least a portion of this increase will be implemented due to continuing firm demand and low inventories.

Operating rates for chlor-alkali producers for July and August were 97% and 96% of capacity, respectively, according to Goodnight, and overall demand growth has been about 1%.

While there has been a modest increase in demand, according to Goodnight, supply has declined and operating rates for North America are higher. Dow’s shutdown of its Ft. Saskatchewan chlor-alkali plant in October 2006 single-handedly trimmed 3% of North American capacity.

Oxford Industries, Inc. (NYSE: OXM), Edge Petroleum Corp. (Nasdaq: EPEX) and Children's Place Retail Stores, Inc. (Nasdaq: PLCE) were among the new 52-week lows established Tuesday among companies with market capitalizations or values under $750 million.

Here are today's 52-week small-cap lows: