Tag - Gil

Despite opening lower this morning, small caps have shrugged off bad unemployment data and are trading higher this afternoon.

At 2:36 pm ET, the Russell 2000 (NYSE:IWM) is up 2.78% at 484.96, while the Dow is up 0.92% and the S&P 500 is up 1.42%.

Although stocks are higher today, they are still down sharply for the week, no thanks to new data out. Today the Labor Department reported that more workers filed last week for benefits than anticipated. New claims jumped to 637,000, much more than what was forecasted. The overall number of people seeking unemployment benefits grew faster than expected, increasing to 6.6 million, while continuing claims hit a 15th straight weekly record.

Small caps on the rise today include Gildan Activewear Inc. (NYSE:GIL), up 21% after announcing second-quarter results, and Forest City Enterprises (NYSE:FCY), up 18% after guiding in line.

*****The selling got serious yesterday. But once again, as TradeMaster technical analyst Jason Cimpl forecast, the dip was a buying opportunity. Stocks are up this morning as if nothing happened…

But of course, something did happen. Cracks in the rally are beginning to show. And economic data is starting to weaken. Consider this morning’s Producer Price Index (PPI). This popular measure of inflation on the wholesale level came in stronger than expected. Prices for food are ticking upward.

No doubt the Fed is relieved to see a little strength in prices, as overall, prices have dropped 3.7% over the last 12 months. The only thing that scares the Fed more than inflation is deflation.

My question is: at what point do rising prices motivate the Fed to start sopping up the flood of liquidity it has released over the last eight months? Clearly, there will have to be stronger signs of recovery, but with the potential for full employment numbers to be higher than they’ve historically been, I can’t help but be . . .

Small-cap stocks remained in negative territory into midday action, but rallied well off the morning lows as bargain hunters swooped in, hoping that this latest foray toward the range lows offered buying opportunity once again. Gains for airline, biotech, mining and IT stocks helped ease some of the losses endured in bank, financial, homebuilder and insurance shares. At 12:25 p.m. ET, the Russell 2000 (NYSE:IWM) was down 3, or 0.67%, at 444.94, after hitting an intraday low at 438.12.

The market fell hard early this morning, with the Dow sinking to the lowest point since the November lows were forged, while small caps appeared poised to test the January range lows. The market just didn’t believe a “too good to be true” retail sales report, which left another dreary reading on the employment picture as the only place to hang one’s trading cap. For those keeping score, the retail sales report was pegged up 1.0%, versus a forecast for a slide of 0.7%, while the weekly unemployment claims report came in at 623,000, slightly above the 610,000 projection. In the background of today’s news, investors continue to fret about the bank bail out plan and whether or not the stimulus bill will have too deep of a lag time to rescue the stock market in the near term.

Biotech stocks were among the top performers so far today, with the AMEX Biotechnology Index up 1.2%. In addition, the AMEX Airline Index was clinging to positive ground, up 0.2% as crude oil prices remained weak.

Speaking of “black gold” — crude prices fell below $35 a barrel this morning as worries about soft demand amid the U.S. recession continue to smack down buyers that are seduced by talk of OPEC production cuts. The dip in crude oil prices likely weighed on energy shares, which were off about 1% into mid-session.

Despite pockets of strength today, key “theme” groups, like banks and homebuilders were carrying the torch for the bears. The ISE Homebuilder Index was . . .

A bleak picture of the nation’s employment picture sparked a solid opening decline for small-cap stocks. Bearish momentum was furthered by a batch of weak profit reports and outlooks for various companies, but another firm tone in commodities offered up support. Some of today’s small-cap gainers are China Eastern Airlines Corp. Ltd. (NYSE:CEA), China Southern Airlines Co. Ltd. (NYSE:ZNH) and Amylin Pharmaceuticals (Nasdaq:AMLN).

Other Market Watch highlights today included:

• The International Trade report also came out this morning and the deficit widened to $57.19 billion, well above the forecast for a deficit of $53.5 billion.  
• The number of continuing claims, which tracks people who are out of work and just can’t a job, rose to 4.429M, above the 4.1M forecast  
• Energy stocks were a dominant force on Wed.'s rally, will be closely watched today to see if commodities can carry the bullish banner again.  
• The unemployment figure marked not just a high for the current economic crisis, but was the biggest number in 26 years. 

Small Cap Gainers:

• China Eastern Airlines Corp. Ltd. soared 56% after the Chinese government served up an aid plan for airlines. See (NYSE:CEA).  
• China Southern Airlines Co. Ltd. is up 33% on Chinese government aid news. See (NYSE:ZNH).   
• Amylin Pharmaceuticals up 11.11% in pre-market after reaffirming plans for Exenatide Once Weekly NDA submission by end of first half of 2009. See (Nasdaq:AMLN). 
• Silver Standard up 8% in pre-market after it reports successful follow-up diamond drilling at Maverick Springs. See (Nasdaq:SSRI). 

Small Cap Losers:

• Gildan Activewear Inc. collapsed 43% as the sports apparel maker badly missed profit expectations. See (NYSE:GIL).  
• Pain Therapeutics gapped lower and shed 25% as the FDA turned down the firm’s experimental pain killer drug. See (Nasdaq:PTIE).  
• Infinity Pharmaceuticals Inc. fell 19% on news that AstraZeneca decided to ditch two of Infinity’s experimental cancer drugs. See (Nasdaq:INFI).
• Retailer lululemon Athletica Inc. releases Q4 results, guides below estimates. Shares fall 18% in pre-market. See (Nasdaq:LULU).

A bleak picture of the nation’s employment picture sparked a solid opening decline for small-cap stocks. Bearish momentum was furthered by a batch of weak profit reports and outlooks for various companies, but another firm tone in commodities offered up support. At 9:57 a.m. ET, the Russell 2000 (NYSE:IWM) was down 4.03, or 0.85%, at 472.37.

The weekly unemployment claims report headline figure came in at 573,000, which swamped the forecast of 525,000 and which was a cycle high so far in the economic malaise. What’s more, it also marked the highest claims number in 26 years. Even more scary is that the number of continuing claims, which tracks people who are out of work and just can’t get a job, rose to 4.429 million, way above the 4.1 million forecast and the highest point since November 1974. It has been fashionable to rally on “bad” economic news lately amid ideas that the market will be forward looking and rally away from the lows long before the news bottoms out, but it is difficult to look past numbers as bad as today’s claims report – especially if you don’t see things getting better for some time to come.

“Although the labor force is much larger now that it was 25 years ago, the number of people actually covered by unemployment insurance has declined substantially,” Steven Wood, chief economist with Insight Economics, said in an email. “More importantly, the deterioration in initial claims, continuing claims, and the insured jobless rate has been as bad as they were during the 1981-1982 recession, which was the most severe in the post-World War II period. Although these data are not for the survey week, they suggest another substantial decline in payroll employment and another jump in the unemployment rate for December.”

The International Trade report also came out this morning and the deficit widened to $57.19 billion, well above the forecast for a deficit of $53.5 billion. The U.S. dollar extended overnight losses against the euro after the report, with the . . .