Tag - Kbh

Stocks moved higher today after several positive reports reversed early downward trading trends. Investors initially drove down stocks on news that first time unemployment claims increased by 15,000 last week.

Gains were made in homebuilders like Lennar (NYSE:LEN), KB Homes (NYSE:KBH), and Toll Brothers (NYSE:TOL) as well as retailers like Bed Bath & Beyond (Nasdaq:BBBY), Kirkland's (Nasdaq:KIRK), and Pier One (NYSE:PIR). Both sectors have seen bankruptcies (Linens and Things, Circuit City, among others) and layoffs over the past year as the souring economy has brought housing starts to a crawl and forced consumers to pull back in discretionary spending.

The broader indexes were up today with the Dow finishing at 8,472.40, the Nasdaq showing positive gains to close up 37.2 points to close at 1,829.54, and the S&P 500 posting a 2.14% gain to close at 920.26.

Small-cap stocks in the Russell 2000 helped propel that index 2.87% to close at 509.14 today.

Leading small-cap gainer was Jazz Pharmaceuticals (Nasdaq:JAZZ) up 37% on news that the late-stage results for its fibromyalgia drug had met the company's main goal. The drug, Xyrem, is scheduled to be submitted for marketing approval. Gains in Jazz shares outpaced gains made by other, better known, pharmaceutical manufacturers including Pfizer (NYSE:PFE), Merck (NYSE:MRK), and share price losses posted by GlaxoSmithKline (NYSE:GSK).

As we've mentioned in previous updates, this follows a general trend of sector rotation as investors are looking for more defensive plays, like healthcare and pharma, over the summer.

Other small-cap gainers for today include CPI International (Nasdaq:CPII) up 32%; Tween Brands (NYSE:TWB) up 27% on news that Dress Barn (Nasdaq:DBRN) will buy it for roughly $157 million in stock; Royale Energy (Nasdaq:ROYL) up 32.5%, an energy company involved in development and exploration of natural gas and oil in California, Texas, and the Rocky Mountain region.

Small-cap decliners were lead by medical oral diagnostics maker OraSure Technologies (Nasdaq:OSUR) down 23% on news that it needs to conduct more additional clinical trials to get approval for its hepatitis C virus test. The exact timing and costs for these additional tests have not been disclosed by OraSure and investors drove down share prices based on this uncertainty.

A number full of other small-cap stocks were big decliners today including data marketing services provider Acxiom Corporation (Nasdaq:ACXM) down 22%; Capital Bank Corporation (Nasdaq:CBKN) down 20%; and Cordorus Valley Bancorp (Nasdaq:CVLY) down 19%.

The Fed has spoken. Interest rates are not going higher anytime soon. And the Fed announced no change to its $1.75 bond purchase program. Bonds sold off, suggesting that traders hoped the Fed would do more to put a floor under prices.  

The Fed made it a point to say that "…inflation will remain subdued for some time." But the Fed also hasn't made any comments about target levels of inflation, or what levels of inflation would make it uncomfortable. With the amount of money being pumped into the system, this is a concern to me. Especially with commodity prices rising and the spread between 10-year Treasuries and 10-year inflation adjusted bonds (TIPS) increasing over the last month.  

*****Nothing will kill whatever recovery the Fed and others see coming faster than higher interest rates fueled by inflation fears.  

Most signs point to an imminent economic recovery. No one thinks it will be strong. But two straight months of increase for Durable Goods orders has most convinced that recovery, and a small level of inflation, is here.  

The Fed, in the other hand, is still fighting deflation. Unemployment is still on the rise, and modest improvement in the housing market doesn't mean we're anywhere close to working off the massive inventory of unsold homes. 

Given the very low expectations for economic recovery, maybe 2% growth in 2010, how does the Fed hike interest rates and start sopping up liquidity? I believe inflation will have to become a concern before the Fed can act.  

*****In case you missed last night's special Internet Video Conference, called Inflation Busters: Discover the Stocks to Grow and Protect Your Wealth, I have a replay ready for you. You can access it HERE.   

*****Reuter's reported yesterday that Rep. Barney Frank and another Democrat wrote a letter to the CEOs of Freddie Mac and Fannie Mae asking them to relax their standards for condo loans.  

Apparently Freddie Mac and Fannie Mae recently said they wouldn't give loans to potential condo buyers if the condo development was less than 70% occupied. Makes sense, these days. But Frank and his friend are worried the tighter standards will impair the housing market and constrict future developments. 

This is appalling. The only thing we need more than more condos is more Hummers.  
If the government truly thinks we can simply reflate our way back to prosperity, they are sadly mistaken. This recession is new animal, one where both consumers and corporations took on way too much debt. That debt now sits in the form of unsold homes, many of which have been foreclosed upon. 

These homes (and condos) must get sold. But they must get sold to people with the means to pay the loans. Simply lowering lending standards doesn't do it and may well prolong the pain of this recession. Isn't the lowering of lending standards much of what got us into this mess to begin with? 

*****China's still throwing its cash around, this time offering $7.2 billion for oil exploration company Addax Petroleum (LSE:AXC.L). It would be state-run Sinopec (NYSE:SNP) actually doing the deal. But after the attempt to buy a $19 billion stake in Rio Tinto (NYSE:RTP) it should be obvious that China is intent on securing the commodities it needs. 

And in a world starved for cash, don't be surprised when China gets what it wants.  

*****Last year, travel group AAA reported that car travel over the 4th of July was down 10.5%. This year, it will fall another 1.9%.  Airline travel is expected to be up nearly 5%.  

 

Stocks are treading lower today, paring some of the recent gains seen in the last two weeks.

At 1:44 pm ET, the Russell 2000 (NYSE:IWM) is down 13.21, or 2.97%, at 432.09, while the Dow is down 2.07% at 7,760.17 and the S&P 500 is down 2.14% at 815.06.

Tech stocks led the decline as did energy stocks, which fell along with the price of oil. Earlier this morning, large-cap benchmark Google Inc. said it is laying off nearly 200 workers, while technology consulting and outsourcing firm Accenture lowered its outlook for the quarter and the year.

Declining oil prices sapped demand for energy stocks. Oil fell below $53 a barrel Friday, a day after hitting a high for the year, as investors worried that crude's recent gains aren't sustainable amid lingering doubts about the economy.

Small caps higher today include China Direct (Nasdaq:CDII), climbing nearly 10% today after announcing they would hold a conference call to discuss financial results for the year ended Dec. 31, 2008. Chinese small cap Agria Corporation (NYSE:GRO) is also up 8% today after the company promoted Raymond Lo to acting CFO after announcing the resignation of former CFO Gary Yeung.

******I’m fond of saying “never underestimate the American consumer.” Retail sales for February came in with a 0.2% rise, even though income fell 0.2%. Stocks look ready to sell off, but it’s not a response to retail sales. The indices have come a long way over the past two weeks, and it’s time for a little profit-taking.

I still believe that “buy the dips” is the appropriate strategy for the current rally. Of course, I’m talking about taking short- to medium-term positions. For . . .

Small-cap stocks pushed higher Tuesday, shaking off losses in the banking and financial sector amid gains for homebuilders, drug and energy shares. The Russell 2000 (NYSE:IWM) closed up 3.28, or 0.73%, at 452.90, but lagged gains in the Dow and S&P 500, which takes some of the edge off the advance. For the year, the Russell is down 9.3%, while the Dow is off 7.9% and the S&P 500 is down 7.1%.

The market started off on a defensive note and continued to chop around on both sides of positive ground until the bulls gained traction in the afternoon. About 30 minutes into the session an upbeat reading on pending home sales and an announcement by the Federal Reserve that they would extend various credit windows helped underpin the market.

For the record, pending home sales came in plus 6.3%, well above the forecast for a flat reading. The upside release helped spark a rise in homebuilder stocks with the ISE Homebuilders Index climbing 8.3%. Several key companies in the homebuilder universe fall within small-cap guidelines, including Meritage Homes Corp. (NYSE:MTH), which jumped 17% on the day. Small-cap builders KB Home (NYSE:KBH) rose 10%, while Centex Corp. (NYSE:CTX) was up 10%.

The other piece of economic data in play today came from various sales reports out of automobile companies. As expected, vehicle sales fell off a cliff again in January, with General Motors Corp. (NYSE:GM) collapsing 49%, Ford Motor Co. (NYSE:F) down some 40%, while Toyota Motor Corp. (now the world’s largest automaker) saw a sales drop of 34% and Nissan tumbled 30%. Despite the sober news on sales, Ford shares actually finished higher on the day (up about 4%), while General Motors was down 3%.

Energy shares outpaced the overall market rise today, helped along by a modest 1.7% advance in crude oil futures, which gained $0.70 a barrel to $40.78. Crude prices were underpinned by talk of additional production cuts out of OPEC and some . . .

Small-cap stocks drifted lower into mid-session, unable to keep pace with mild gains in large-cap indices as smaller banks and financial firms were a drag on the Russell 2000 (NYSE:IWM). Some of today’s small-cap gainers were PharmaNet Development Group Inc. (Nasdaq:PDGI), Allied Healthcare International Inc. (Nasdaq:AHCI) and KB Home (NYSE:KBH).

Other Market Watch highlights today included:

• Poor performers were regional banks, diverse financial services firms, consumer finance companies, diversified banks, casinos and REITs.   Feb 03, 2009 1:11pm
• Personal products companies, steel stocks, coal firms and general merchandise stores were all doing well today.   Feb 03, 2009 1:10pm
• Motorcycle manufacturers were a top performer today, but the large automakers were in retreat mode as they release sales numbers today.   Feb 03, 2009 1:10pm
• Bank stocks were a major drag on the market, with the KBW Banking Index off about 4.1%. 

Small Cap Gainers:

• PharmaNet Development Group Inc. soared 244% on news the firm will be acquired by JLL Partners Inc. for $5 a share. See (Nasdaq:PDGI).  
• Allied Healthcare International Inc. was up 21% on heavy turnover amid an earnings-related boost. See (Nasdaq:AHCI).  
• Small-cap homebuilder KB Home was up 6.8%, while Meritage Homes Corp. was up 10.9%. See (NYSE:KBH) and (NYSE:MTH)

Small Cap Losers:

• Complete Production Services slips to loss in Q4; shares tumble over 16%. See (NYSE:CPX).  
• Colonial Properties shares sink 12% on Q4 report. See (NYSE:CLP).  
• Warner Music Group Corp. was off 6.4% on active volume; the only apparent news was a PR release last night that the firm would enter a global distribution deal with Destiny Media. See (NYSE:WMG). 

Small-cap stocks drifted lower into mid-session, unable to keep pace with mild gains in large-cap indices as smaller banks and financial firms were a drag on the Russell 2000 (NYSE:IWM). At 12:17 p.m. ET, the Russell was down 0.60, or 0.13%, at 449.02.

Losses were limited by a surprisingly stout rise in pending home sales, which were up 6.3%, compared with market expectations for a flat number. Homebuilder stocks seemed to get a lift from the number, with the ISE Homebuilder Index rising 5.2%. Small-cap homebuilder KB Home (NYSE:KBH) was up 6.8%, while Meritage Homes Corp. (NYSE:MTH) was up 10.9%.

The Federal Reserve also announced plans to keep programs on commercial paper operations running for a longer time frame, which was a supportive element for the market. Despite those two upbeat news items, bank stocks were a major drag on the market, with the KBW Banking Index off about 4.1%.

Earnings were a mixed bag today, but expectations are so low on the profit front, that any sign of mild upside surprises is embraced by investors. Drug maker Merck & Co. (NYSE:MRK) beat the estimate and was a big supportive element for the Dow index. Drug stocks in general were outpacing the overall market, with the AMEX Pharmaceuticals Index up 1.6%.

Looking at sector activity, motorcycle manufacturers were a top performer today, but the large automakers were in retreat mode as they release sales numbers today. General Motors Corp. (NYSE:GM) was down 6.1%, while Ford Motor Co. (NYSE:F) was down 3.1%. Personal products companies, steel stocks, coal firms and general merchandise stores were all doing well today. On the downside, the . . .

Small-cap stocks took a hit Thursday, snapping a string of four consecutive winning sessions with a resounding downside spiral as dreary economic data and lousy corporate profit reports triggered a wave of selling. The Russell 2000 (NYSE:IWM) tumbled 19.78, or 4.18%, to 453.24, and is now down 9.2% for the year. The Dow is now down 7.1% for 2009, while the S&P 500 is off 6.4%.

Just one day after generating the second-biggest rally of the year, the Russell slumped to the third worst daily decline, reminiscent of the roller coaster ride surrounding the Obama inauguration, which saw the best and worst days of 2009 in back-to-back fashion. It has become a familiar and uncomfortable trendless volatility as the market waffles between bargain hunting and renewed dread about the worst economic recession since the Great Depression 70 years ago.

Today’s big event was a trio of economic reports that stood to remind us all that even though data might be a “lagging” indicator for stocks, when the numbers get numbingly awful, the confidence to shrug them off starts to wane. This morning saw weekly unemployment claims rise to 588,000, which was slightly above the forecast. But it wasn’t the weekly figure that was troubling, it was the number of Americans forced to file for continuing unemployment benefits because they can’t find a job. That number swelled to 4.77 million, the highest number on record. There are now more people than ever before forced to draw unemployment insurance, and we’re supposedly not yet at the worst of the jobs situation.

“In addition to staggering layoff announcements in January across a wide spectrum of firms, the actual number of folks filing for unemployment insurance climbed 3,000 during the week ended Jan. 24. Continuing claims, which lag initial claims by one week, advanced to 4.776 million and the insured unemployment rate increased to 3.6%, which is a cycle high from 3.4% in the prior week. The January employment report is likely to show a grimmer picture of the labor market compared with the December data,” Asha Bangalore, economist with Northern Trust, said in an email. 

And while the weekly claims report alone was an uncomfortable piece of data, there was no relief to be found in the monthly durable goods report or the latest reading on new home sales. Durable goods orders declined for the fifth consecutive . . .

Small-cap stocks remained lower into mid-session, pulled down by losses in commodity, financial and technology stocks amid ongoing worries about corporate profits in one of the deepest economic recessions since the Great Depression.  Some of today’s small-cap gainers are A-Power (Nasdaq:APWR), Aladdin Knowledge Systems (Nasdaq:ALDN) and Mindray (NYSE:MR).

Other Market Watch highlights today included:

• Corn futures crashed 7%, touching limit down losses and the Gold and Silver Index slumped more than 5%, reflecting losses for mining and metals shares.  
• Commodities were hit especially hard today, with crude oil prices tumbling 7% on worries about the global demand picture.  
• Overseas markets were lower coming into today’s session, which likely weighed on the market as well. 
• 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. 

Small Cap Gainers:

• GE joins with A-Power on wind turbine gearbox equipment; shares of A-Power rise 21%. See (Nasdaq:APWR)
• Aladdin Knowledge Systems agrees to buyout at 20% premium; shares rise 14%. See (Nasdaq:ALDN).  
• Mindray announces preliminary 2008 operating results; shares pop 14%. See (NYSE:MR).
• The Cooper Companies is up 8% today after declaring a half-year cash dividend last week. See (NYSE:COO).

Small Cap Losers:

• Small-cap gold stock Detour Gold Corp. is down 21%. See (Nasdaq:DRGDF). 
• Small-cap coal company Patriot Coal Corp. fell 17.3% as commodities slumped across the board today. See (NYSE:PCX).
• Small-cap eatery Morton’s Restaurant Group Inc. is down 7.8% as restaurant stocks get clobbered. See (NYSE:MRT).  
• Homebuilder shares were taking a hit today, with small-cap builders Centex Corp. down 7.7%; KB Home off 6.2% and Meritage Homes Corp. down 10.5%. See (NYSE:CTX), (NYSE:KBH) and (NYSE:MTH).  

Small-cap stocks remained lower into mid-session, pulled down by losses in commodity, financial and technology stocks amid ongoing worries about corporate profits in one of the deepest economic recessions since the Great Depression. At 12:43 p.m. ET, the Russell 2000 (NYSE:IWM) was down 5.11, or 1.06%, at 476.18.

Commodities were hit especially hard today, with crude oil prices tumbling 7% on worries about the global demand picture. Elsewhere in commodities, corn futures crashed 7%, touching limit down losses and the Gold and Silver Index slumped more than 5%, reflecting losses for mining and metals shares. Small-cap coal company Patriot Coal Corp. (NYSE:PCX) fell 17.3%. In addition to the general decline in energy and commodities, PCX announced late Friday that they would close their Jupiter mining complex. Small-cap gold stock Detour Gold Corp. (OBB:DRGDF) was down 21%.

Treasury Secretary Henry Paulson said that the U.S. economy was going through a “difficult” economic period, which isn’t exactly a fresh revelation, but which did appear to spook investors and extend the morning pullback in equities. Credit markets were higher, which pulled some money flow away from stocks.

Homebuilder shares were taking a hit today, with small-cap builders Centex Corp. (NYSE:CTX) down 7.7%; KB Home (NYSE:KBH) off 6.2% and Meritage Homes Corp. (NYSE:MTH) down 10.5%.

Looking at the financial arena, bank stocks were getting drubbed, with the KBW Banking Index off 3.6% and Citigroup Inc. (NYSE:C), down more than 10% amid analyst talk that the bank may still need more capital even after . . .

Small-cap stocks remained lower into mid-session, pressured by worries over the economy following a dour report on the nation’s employment status. Energy shares and homebuilders were taking a hit today, which added to the bearish tilt. Still, the market bounced off the early lows as investors continue to bet that the worst of the recession news is already priced into the market. At 12:26 p.m. ET, the Russell 2000 (NYSE:IWM) was down 11.79, or 2.35% at 490.22.

Today’s monthly employment release from the Labor Department said that the unemployment rate climbed to 7.2%, the highest level since 1993. Although the jobless rate was above expectations, the 524,000 decline in non-farm payrolls met the consensus forecast and was better than the “whisper” numbers floating about ahead of this morning’s report. Treasury markets turned higher after the news, which suggests the economy fears are still very much in play.

Looking at sector activity so far today, technology stocks, energy firms, banking shares and homebuilders were pacing the declines. Retailers were also taking a hit, with apparel and accessory companies down hard again today. Losers were swamping ...

Small-cap stocks turned lower into mid-session trading, unable to sustain a mild morning rise as ongoing worries about the economy came back to the forefront following dreadful data on home sales. As expected, homebuilders were among the hardest hit stocks so far today, with retailers, banks and auto manufacturers also acting as a drag on the market. At 12:49 p.m. ET, the Russell 2000 (NYSE:IWM) was down 7.79, or 1.64%, at 467.28.

Existing home sales, which account for the overwhelming majority of activity, plunged 8.6% to an annual rate of 4.49 million units, far below the projection of 4.93 million units. What’s more, the price on homes tumbled 13.2%, the biggest percentage decline in 40 years. The ISE Homebuilders Index tumbled 3%, outpacing the overall market slide by a wide margin. Among small-cap homebuilders, Centex Corp. (NYSE:CTX) was off 4.1%; KB Home (NYSE:KBH) was down 3%; and Lennar Corp. (NYSE:LEN) was down 4%.

The worst performers so far today have been the automakers, with General Motors Corp. (NYSE:GM) down 15% and Ford Motor Co. (NYSE:F) off 16% following news that their credit ratings were slashed. The PHLX Retail Index was down 1% at midday, while the S&P Retail Index was off about 0.5%. Big department stores were among the worst sector groups today, with Macy’s Inc. (NYSE:M) sinking 5.5%.

The ongoing fretting about the economy pulled down crude oil prices, which slipped below $39 a barrel, off about 3.7% at midday. Energy shares weren’t as weak as the cash market, but were still down about 0.9%, with oil and gas drillers among the weaker performers.

Financial shares were holding up reasonably well, but banks were a noticeable source of strain in the financial arena. The KBW Banking Index was off . . .

Small-cap stocks stormed higher Tuesday, extending a morning rally when investors got word that the Federal Reserve slashed interest rates to the lowest level in history and hinted that they wouldn’t hesitate to utilize other tactics to help jolt the moribund economy out of one of the worst recessions since the Great Depression of the 1930s. The Russell 2000 (NYSE:IWM) rose 30.28, or 6.69%, to 482.35, the highest daily close since Nov. 13. For the year, the Russell is still down 37%, while the Dow is off 33% and the S&P 500 is down 38%.

The FOMC stunned the market by slashing rates by 75 to 100 basis points, well beyond the 50-bp cut that was expected. Policy makers also made no bones about their mission right now: save the economy, worry about prices later. In fact, the Fed’s own statement said they would “employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability.” With prices sinking as evidenced by today’s CPI report, the clear goal is economic growth. Now that the Fed is basically handing out money free of charge to those with access to the Fed window, the next order of business would appear to be attacking long-term interest rates, either through direct purchases or other means. The action was bold and stock market investors liked the approach.

It will be interesting to see if the heightened focus on long-term rates will provide a spark to the moribund housing market. Housing starts numbers released this morning tumbled to the lowest rate in history and slumped 18.9% on a seasonally adjusted rate. Despite the gloomy picture of the housing market, homebuilder shares took off today, attracting bottom-fishers on hopes that a light at the end of the tunnel . . .

Small-cap stocks extended the rally into mid-session trading, boosted by a bounce in the financial arena, which has been a notable source of weakness in previous days. In addition, homebuilder, retailer and insurance firms were strong performers today and the raft of companies fitting those profiles in the small-cap universe helped the Russell 2000 (NYSE:IWM) outperform the Dow and S&P 500. At 12:31 p.m. ET, the Russell was up 12.84, or 2.84%, at 465.41.

The financial sector got a lift from Goldman Sachs Group Inc. (NYSE:GS), which reported quarterly results that were awful, but which the market embraced as a sign that “the kitchen sink” was tossed into the loss. GS shares were up 9.1% at midday. The Securities Broker Dealer Index was up 5.6% and the KBW Bank Index was up 3.6%.

Homebuilder shares have been on a roller coaster ride lately, but retain a potential bottom on long-term charts and were back on an upside tilt today after sinking on Monday. The ISE Homebuilder Index was up 5.6%, with small-cap firm KB Home (NYSE:KBH) rising 7.1%. It was interesting to see homebuilder shares doing so well today despite a terrible report on housing starts, which tumbled to a record lows and were off 18.9%.

Retail stocks also were doing well today after Best Buy Co. Inc. (NYSE:BBY) reported strong quarterly results and cost-cutting efforts to brace for a potentially sluggish holiday season. BBY shares were up 15.2% today and the S&P Retail Index rose 2.3%.

Another clear source of strength today came from insurance stocks, with the S&P Insurance Index climbing 4.2%. Small-cap firm Genworth Financial Inc. (NYSE:GNW) soared some 40%, climbing to the highest point since early November.

The market now will go into a waiting mode for the 2:15 p.m. ET FOMC policy announcement. The Fed is widely expected to lower the Fed funds target by 50 basis points down to 0.5%, but futures markets are pricing in a 60% chance for a 75-bp cut. The big reaction will likely come from the Fed’s statement, as the . . .

Small-cap stocks started out the week with a whimper as bleak manufacturing data, sinking financial and homebuilder shares and money flow away from equities took a toll on the market. The Russell 2000 (NYSE:IWM) closed down 15.86, or 3.39%, at 452.57 and is now down 41% for the year, while the Dow is off 35% and the S&P 500 down 41%.

Bank and financial shares have been a persistent drag on the market in recent days. The big news on the banking front today was an analyst downgrade on JP Morgan Chase and Co. (NYSE:JPM), which pulled down the rest of the financial universe. JPM shares lost 7.4% on the day, and the Financial Select Sector SPDR was off 4.1%. The market also was reluctant to buy bank and financial stocks ahead of earnings releases from Goldman Sachs Group Inc. (NYSE:GS) and Morgan Stanley (NYSE:MS); both firms lost some 1% on the day. Treasury market yields tumbled some 2% on the day, indicating that money was moving toward safe-haven outlets in concert with the weak tone in equities.

A fresh batch of economic data today was predictably awful, with the New York Manufacturing Survey sinking to a record low and the industrial production report showing a decline of 0.6%. That said, both of the reports were actually better than forecast and a much worse reading on manufacturing overnight in Japan didn’t stop the Nikkei from rising 5.2%, so it would be presumptuous to blame today’s . . .

Small-cap stocks were holding ground into mid-session, buoyed by hope for a White House rescue for automakers and by a bounce in tech stocks, real estate investment trusts, homebuilders and gold stocks, which helped counter ongoing weakness in the financial arena. At 12:32 p.m. ET, the Russell 2000 (NYSE:IWM) was up 4.18, or 0.93%, at 455.39, even though the Dow and S&P 500 were both in negative territory.

On the auto front, the White House appears ready to throw a lifeline to cash-strapped firms via the TARP funds, which have previously been utilized primarily in the banking arena. President-elect Obama also stated that he was disappointed that the Senate shot down a $14 billion bailout bill and the hoped the White House and Congress will find a way to help beleaguered U.S. automakers. As it became apparent some type of emergency bridge loan or funding proposal would more than likely take place quickly, shares in both General Motors Corp. (NYSE:GM) and Ford Motor Co. (NYSE:F) rallied hard off the morning lows. In fact, Ford climbed into positive ground, after sinking some 26% earlier in the day.

The resilient rise in small caps was a welcome sign after stock index futures tumbled 4% overnight when the Senate first squashed the automaker bill. Real estate investment trusts (REITS) were on a serious roll today, with small-capper Prologis (NYSE:PLD) jumping 26%, reversing a big slide from Thursday. Small-cap firm Apartment Investment & Management Co. (NYSE:AIV) was up nearly 7% and Developers Diversified Realty Corp. (NYSE:DDR) jumped 11% -- all of these companies were hammered Thursday and were in correction mode today.

On the homebuilder front, small-cap firm Centex Corp. (NYSE:CTX) rose 4%, KB Home (NYSE:KBH) was up 4% as well and Lennar Corp. (NYSE:LEN) was up 5%. Homebuilder shares were a hot ticket last week when mortgage applications shot to the highest point since February, but they cooled off this week until . . .

Small-cap stocks reversed course, putting a brief but sharp morning slide on awful economic data in the rear-view mirror as investors gobbled up homebuilding, retail and financial shares and set aside any economic worries stirred by sobering private employment and services sector activity reports.  Some of today’s small-cap gainers are Forest City Enterprises Inc. (Nasdaq:FCE.B), Grey Wolf Inc (NYSE:GW) and Orthofix Intl. (Nasdaq:OFIX).

Other Market Watch highlights today included:

• Crude oil prices stabilized after weekly inventory reports showed a decline in crude oil stockpiles and a drop in refined products.  
• Obama: Automakers appear to be formulating “more serious” business models to help justify a government bailout of the ailing sector.  
• The ISE Homebuilders Index jumped 10% and small-cap homebuilders were among the best performers in the group.  
• The ability to rally after a bad reading on the ADP Employment Survey ahead of Friday’s big monthly employment report was a positive sign.


Small Cap Gainers:

• Forest City Enterprises Inc. jumped 26% as the commercial property firm benefited from the bounce in homebuilder and REITS. See (Nasdaq:FCE.B).  
• Grey Wolf Inc. rose 23% as the oil and gas driller announced a merger deal with Precision Drilling Trust. See (NYSE:GW).  
• Orthofix Intl. climbed 21% on news that a large owner in the firm is pushing for it to call a special shareholder meeting and sell a medical business unit, reduce corporate overhead. See (Nasdaq:OFIX).  
• Other small-cap homebuilders rallying today were Lennar Corp., which was up 8%, and KB Home, which soared 16%. See (NYSE:LEN) and (NYSE:KBH).

Small Cap Losers:

• Infineon Technologies sees a widened Q4 loss; shares careen 38%. See (NYSE:IFX).  
• IIVI Inc. was off 15% as the electronics and telecommunications manufacturing company revised guidance downward. See (Nasdaq:IIVI).  
• Alpha Natural Resources Inc. fell 14% as the coal miner revised guidance. See (NYSE:ANR).  
• Bucyrus sinks 7.4% in pre-market after completing its purchase of Czech firm, OKD Bastro. See (Nasdaq:BUCY). 

Small-cap stocks reversed course, putting a brief but sharp morning slide on awful economic data in the rear-view mirror as investors gobbled up homebuilding, retail and financial shares and set aside any economic worries stirred by sobering private employment and services sector activity reports. At 12:26 p.m. ET, the Russell 2000 (NYSE:IWM) was up 4.75, or 1.07% at 446.57.

Small caps were leading the way on the midday surge, which suggests that investors were willing to take on a more aggressive posture and not just sit on defensive, low-risk plays. Along that theme, yields on Treasury products were higher as demand clearly was more focused on riskier fare today.

The ability to rally in the face of a bad reading on the ADP Employment Survey ahead of Friday’s big monthly employment report was a positive sign for the market. In addition, the ISM non-manufacturing survey came in well below the forecast, showing the services sector of the economy is mired deep in recession.

Homebuilder stocks were in rally mode Tuesday and remained a hot item today. The ISE Homebuilders Index jumped 10% and small-cap homebuilders were among the best performers in the group. Centex Corp. (NYSE:CTX) was a star Tuesday and jumped another 12% today. Meanwhile, Lennar Corp. (NYSE:LEN) was up 8% and KB Home (NYSE:KBH) soared 16%. Homebuilder shares appear to be attracting bargain hunters amid sentiment that the government’s new focus on lowering long-term and mortgage rates will spur renewed activity in the housing sector and generate fresh refinancing at lower interest rates. President-elect Obama said today that homeowners inability to pay mortgages is a key part of the recession.

Obama also said that automakers appear to be formulating “more serious” business models to help justify a government bailout of the ailing sector. Ford Motor Co. (NYSE:F) was up 5%, but General Motors Corp. (NYSE:GM) was down . . .

Small-cap stocks staged a solid recovery rally Tuesday, recovering a hefty slice of the historic collapse from Monday’s freefall but remaining in the shadow of that epic decline. Strength today stemmed from short-term oversold conditions, hope for a rescue bail-out of automakers as well as bargain hunting in financial and homebuilder shares. The Russell 2000 (NYSE:IWM) closed up 24.75, or 5.93%, at 441.82. The Russell is now down 42% for 2008, while the Dow is off 37% and the S&P 500 is down 42%.

Optimism for a $25 billion aid package for embattled U.S. carmakers may have played a supportive role in the action today, but stock in General Motors Corp. (NYSE:GM) came tumbling down from a steep morning rally after word got out that November vehicle sales collapsed 41.3% versus the same month last year. Executives from the Big 3 automakers submitted plans to Congress for the bail-out proposal. Ford Motor Co. (NYSE:F) was the first to release their plan, which called for a $9 billion loan, no executive bonuses, a reduction in dealers and new plans for electric cars. Into the close, GM shares were up slightly, while Ford was up about 4%.

Financial stocks were among the top performers today, with the Financial Select Sector SPDR Fund up 5%, including another sizable rise in Citigroup Inc. (NYSE:C), which was up 9%. Smaller banks and financial firms dominated the best percentage movers as well.

Homebuilder shares were surprisingly stout, with the ISE Homebuilder Index climbing 7.5%. Within the small-cap universe, KB Home (NYSE:KBH) jumped 9.5%, Lennar Corp. (NYSE:LEN) rallied 14.1% and Centex Corp. (NYSE:CTX) rose 11.5%. Perhaps the group was simply oversold, and perhaps some of the move was tied to hopes that further rate cuts and the government’s new push on lowering longer-dated debt rates would revive the sagging housing industry. On Monday, Federal Reserve Chairman Ben Bernanke intimated that the Fed could purchase long-term products and that sentiment was echoed today by Philadelphia Federal Reserve Bank President Charles Plosser, who said that the Fed certainly can buy Treasury products and . . .

Small-cap stocks gyrated between positive and negative territory in the first half hour of trading as record-high crude oil prices, safe-haven flow away from stocks and steep declines in global markets overnight countered a decent personal income report. The market was oversold after Thursday’s collapse, and price action could be choppy ahead of the end of the quarter. At 10:03 a.m. ET, the Russell 2000 (NYSE:IWM) was up 1.62, or 0.23%, at 700.04.

The Michigan sentiment survey slipped to 56.4, which was slightly below the forecast of 57, but the number was not enough of a surprise to spark a big move in stocks.

The personal income report headline figure jumped 1.9%, which was well beyond the median forecast for a rise of 0.7%. However, when discounting the impact of the tax stimulus checks, real income was only up 0.4%. The May PCE deflator was up 0.1%, which was better than the forecast for a rise of 0.2%, which sparked a pre-opening bounce off overnight lows in stock index futures.

“Real consumer spending jumped in May, boosted by the tax stimulus checks,” Steven Wood, chief economist with Insight Economics, said in an email. “This will allow consumer spending to rebound and keep Q2 growth positive (albeit weak). After the rebate checks are spent, ongoing job losses will weaken income growth, slow consumer spending and dampen economic growth during the second half of the year. Eventually, weak economic growth will dampen inflation — at least that’s the FOMC’s hope,” Wood said.

Despite the mild upbeat news from personal income data, the market still was on edge about crude oil prices, which climbed to a fresh record high overnight above $142 dollars a barrel. Crude prices backed off toward $140 into the stock market . . .