Tag - Gncma

The Russell 2000 (NYSE: IWM) closed with a steep loss as recession fears spread on Wall Street. The small-cap index fell 16.14 points, or 2.45%, to 643.97. The Dow Jones Industrial Average (INDU) lost 153.54 points, or 1.29%, to 11,740.15.

On a year-to-date basis, the Russell 2000 has declined 15.93%, while the Dow is down 11.50% and the S&P 500 has shed 13.28%.

The bears dominated the session today as the specter of recession loomed in the background. Friday’s disappointing jobs report, which showed that payrolls plunged 63,000 in February, led many economists to conclude that the U.S. economy is either in or will soon be in a recession.

A report by investment bank The Goldman Sachs Group, Inc. (NYSE: GS) released before the start of trading forecasts that the U.S. Federal Reserve will respond by lowering its target federal funds rate to 2% by late April to give the economy a boost.

The federal funds rate, the rate commercial banks charge each other for overnight loans, currently stands at 3%.

The Russell 2000 was on a steady decline from the start of trading, slowly sliding lower throughout the course of the day. Today’s declines were led by shares of steel companies and shares of companies in the financial services industry.

The Russell 2000 (NYSE: IWM) posted a rise on a quiet day that saw investors go bargain hunting. The small-cap index advanced 0.85 points, or 0.12%, to 699.75. The Dow Jones Industrial Average (INDU) climbed 57.88 points, or 0.48%, to 12,240.01.

On a year-to-date basis, the Russell 2000 has let go 8.65%, while the Dow has retreated 7.73% and the S&P 500 has declined 8.80%.

Trading began on a bearish note but the bulls returned during the second half of the session as investors took a second look at stocks that had declined for four of the past five days.

The futures were pointing up and the Russell 2000 opened in the green but stayed there only minutes, weighed down by news of more credit problems stemming from the slump in the U.S. housing sector.

Insurer American International Group Inc. (NYSE: AIG) announced that it may have to write off billions in mortgage debt and would need to change the way it values its credit default swaps involving collateralized debt obligations.
That news hurt financials, with shares of insurance companies being among the biggest losers today.

The small-cap index dropped to its lowest levels during today’s session at about 10:20 a.m. ET, but began a choppy ascent into positive territory at about 1 p.m. ET.

With little on the economic front, news that Sunnyvale, Calif.-based Yahoo! Inc. (Nasdaq: YHOO) rejected a $42 billion takeover bid from Microsoft Corp. (Nasdaq: MSFT) grabbed the headlines.

The Redmond, Wash.-based software giant is expected to make an improved offer.

The Russell 2000 (NYSE: IWM) futures are a whisker above the index’s closing level on Friday and small-cap stocks are set for a flat holiday opening.

News of corporate deal-making is grabbing the headlines this morning, as International Business Machines Corp. (NYSE: IBM) announced that it will buy Cognos Inc. (TSE: CSN), a maker of business intelligence software, for $5 billion.

Meanwhile, online broker E*Trade Financial Corp. (Nasdaq: ETFC) was downgraded by Citigroup Inc. (NYSE: C) and the possibility of bankruptcy was raised.

No major economic indicators are scheduled for release today and trading volume promises to be light as Americans observe Veterans Day.

Here are the biggest percentage gainers and losers in pre-market trading among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• Shengdatech Inc. (SDTH), up 9% on news of a rise in third-quarter profit.
• VASCO Data Security International Inc. (VDSI), up 8% on news it is expanding its product offerings.
• Internet Initiative Japan Inc. (IIJI), up 7% on news of a rise in fiscal second-quarter profit.

Biggest percentage losers:

• Perceptron Inc. (PRCP), down 42%.
• General Communication Inc. (GNCMA) down 8%.
• GPC Biotech AG (GPCB) down 8%.

General Communication, Inc. (Nasdaq: GNCMA) shares are plummeting after the Alaska-based communications provider reported third-quarter net income of $2.2 million, or $0.04 per share, far below analyst estimates of $0.14 per share and down 66% from $6.5 million, or $0.12 per share, a year earlier.

“Unfortunately our strong success in the marketplace was offset by continued challenges in our carrier business which is down significantly from the prior year. The reductions in carrier traffic and some sluggishness in our commercial sector overwhelmed the success of our consumer business to produce very disappointing financial results for the quarter,” Ron Duncan, General Communication’s president, said in a statement. "The carrier market has been volatile this year and we have confronted both pricing pressures and traffic shifts.”

Quarterly revenue grew to $133.9 million, from $125.1 million a year earlier but below Wall Street projections of $136 million.

After General Communication’s earnings release, Oppenheimer & Co. downgraded the company to “neutral” from “buy.”

In afternoon trading, GNCMA shares are down 25.75%, or $3.02, at $8.71. Over the last 52 weeks, shares have ranged from $8.65 to $16.10.

The Russell 2000 (NYSE: IWM) and the other major U.S. indices are still well below the flat line on negative news from corporate heavyweights. At 2:01 p.m. ET, the small-cap index had dropped 25.55 points, or 3.9%, to 802.47. The Dow Jones Industrial Average (INDU) had lost 264.27 points, or 1.9%, to 13,665.74.

The day began with sharp declines on news that Exxon Mobil Corp. (NYSE: XOM) reported a bigger-than-expected drop in third-quarter profit and missed Wall Street’s expectations, while Citigroup Inc. (NYSE: C) was downgraded to “sector underperform” from “sector perform” by investment bank CIBC World Markets over concerns that it might have to cut its dividend to raise more than $30 billion to shore up its capital.

Stocks dove so sharply that trading curbs were introduced to prevent a massive sell-off.

The overwhelmingly bearish mood is also due to investors’ realizations that an additional cut in the target interest rate is unlikely during the remainder of 2007.

On Wednesday the U.S. Federal Reserve lowered the federal funds rate to 4.5% from 4.75% but made no reference about the possibility of future action.

In economic news, the U.S. Commerce Department reported before the opening that the price index for personal consumption expenditures, a measure of inflation, added 0.2% in September after staying put in August. The core PCE, which excludes the more volatile costs of food and energy, also gained 0.2%.