Tag - Ktec

The Russell 2000 (NYSE:IWM) gave up early gains today to slip for the fourth consecutive week, finishing off the first month of the year with a sizable loss of 11.2%. Some of today’s small-cap gainers were Horizon Lines (Nasdaq:HRZN), Accuray (Nasdaq:ARAY) and Clearwater Paper (NYSE:CLW).

Other Market Watch highlights today included:

• The GDP report headline figure came in at minus 3.8%, which was much better than expected.
• Even though the number beat the projection, it was still the worst showing for the U.S. economy since 1982.
• The Chicago headline figure came in at 33.3, which was below the forecast of 34.9.
• The Goldman Sachs Analyst Index, a survey of Goldman’s equity analysts across a range of sectors, fell to an all-time low in January.
• The Dow fell 8.8% in January, while the S&P 500 was off 8.5%. This marked the worst start to the year in history for the stock market.
• Looking ahead to next week, we’ll see another full slate of reports starting out with the ISM Manufacturing Survey on Monday and then heading into the main event – Friday’s big monthly employment release.

Small Cap Gainers:

• Horizon Lines posted a surprise adjusted Q4 profit; shares rocketed 19%. See (NYSE:HRZ).
• Accuray climbed 26% after Q2 profit met estimates. See (Nasdaq:ARAY). 
• Clearwater Paper closed up over 11% after announcing Q4 and . . .

Small-cap stocks finished out the week with a whimper, as talk that a delay in the whole “bad bank” concept was in the mix as lawmakers struggle to define the concept. An upside surprise on GDP provided a brief bullish spark, but details within the report tainted any bullish interpretation of the news. And since GDP was still the worst showing since 1982, maybe any bullish slant on the number would have just been market spin anyhow.

For the day, the Russell 2000 (NYSE:IWM) lost 9.72, or 2.14%, to 443.53 and for the week, the Russell gave up early gains to slip for the fourth consecutive week and finished off the first month of the year with a sizable loss of 11.2%. Meanwhile, the Dow fell 8.8% in January, while the S&P 500 was off 8.5%. This marked the worst start to the year in history for the stock market.

The market started out the day with a modest upside surprise when the quarterly GDP report showed a smaller-than-expected contraction in the U.S. economy in the fourth quarter. The GDP headline figure came in at minus 3.8%, which was quite a bit better than the consensus forecast for a decline of 5.3% and some of the whisper numbers approaching 6%. The upside surprise on GDP helped provide a brief bid for stocks into the opening today, but news didn’t have legs. According to Northern Trust economist Asha Bangalore, some of that was likely due to the devil in the details.

“The minus sign for GDP growth was not a surprise but a larger decline was widely expected,” Bangalore said in an email. “The increase in inventories (+$6.2 billion vs. -$29.6 billion in Q3), which was largely unexpected, offset the weakness in demand and trimmed down the headline reading.” 

In other economic news today, the market seemed to recoil off a reading on Midwest manufacturing activity as the Chicago Purchasing Manager’s survey set a new cycle low at 33.3, which was below the forecast of 34.9. Data on the employment cost index was basically in line with expectations and tends to grab more attention . . .

Small-cap stocks extended the rally into midday trading, powered by ideas recent government plans to pour billions of dollars into banking institutions, while mopping up toxic debt with taxpayer coffers would right the ship in equities and avert an even deeper global economic downturn. At 12:45 p.m. ET, the Russell 2000 (NYSE:IWM) was up 32.27, or 6.18%, at 554.76.

The Russell was pushed through minor “figure” resistance at 550, then stalled just shy of 555. While 555 might offer some resistance of note based on previous price action, the key upside test spot from here is actually up at 567. Although the chart patterns have improved dramatically since the big bounce off Friday’s lows, there is still some concern that today’s rally was driven more by oversold conditions than a true sense that clogged credit lines were starting to pry open. In addition, much of the hope for a bottom is tied to a thaw in lending practices and the credit market is closed today for the Columbus Day holiday.

Speaking of additional measures to shore up listing banks, European governments over the weekend said that they would guarantee inter-bank loans, which should help ease the distrust that has seen Libor rates holding high despite interest rate cuts around the world.

In addition to that move, government bodies in the United Kingdom, France and Germany said that they would plow billions of dollars into key banks and the U.S. Treasury Department said that they were considering plans to purchase equity in financial institutions. Some might see that as a “green light” to buy financial stocks present depressed values, but financial shares as seen in the Financial Select Sector SPDR and the PHLX KBW Banking Index were actually underperforming the . . .

Small-cap stocks went into rally mode Wednesday, as an economic report on “big ticket” purchases soothed investor worries about business and consumer spending habits and allowed the market to shrug off a rally in crude oil prices. The Russell 2000 (NYSE:IWM) closed up 9.44, or 1.30%, at 732.95, and is now down 4.3% for the year. Small caps were strong relative to large-cap indices, with the Dow up 0.79% on the day, while the S&P 500 was up 0.80%. For the year, the Dow is off 13.2%, while the S&P 500 is down 12.7%.

That soothing economic report —  the durable goods release — came in well above expectations at a gain of 1.3% versus the forecast for a meager rise of 0.1%. This data base can be quite volatile, but even when extracting the transportation segment (which can skew the total because of huge airplane purchases), the figure was still up 0.7% and well past expectations, which helped investors think that spending patterns for business and consumers were managing to glide through these difficult times without too much disruption.

However, before anointing an erratic economic release like durables as today’s stock market savior, it should be noted that there are far more dynamic reports on tap Thursday in the form of GDP and weekly unemployment claims.

“I’m not a big fan of the durable numbers,” Nick Kalivas, vice president of financial research with MF Global, said in an email interview. “I think there is short-covering at month-end; just look at the rally in Freddie Mac and Fannie Mae. I agree that the financial system is fragile, but the news has not been overly surprising and the end of the month has hedge funds booking profits on shorts. Small caps also have a history of performing well at the turn of the month, and the upside push in oil might be seen by many as a temporary shock given the relatively firm tone in the . . .

Emergent BioSolutions Inc. (Nasdaq:EBS), Citi Trends Inc. (Nasdaq:CTRN) and 51Job Inc. (Nasdaq:JOBS) are among the biggest percentage losers in Thursday's trading among companies with market capitalizations under $1 billion.      

Also included among the results: ExlService Holdings Inc. (Nasdaq:EXLS), Micrus Endovascular Corp. (Nasdaq:MEND), Perficient Inc. (Nasdaq:PRFT), Reddy Ice Holdings Inc. (Nasdaq:FRZ), Overhill Farms Inc. (Nasdaq:OFI) and Key Technology Inc. (Nasdaq:KTEC).       

Here are the biggest percentage losers among small caps:   

Key Technology, Inc. (Nasdaq: KTEC) cleans your plate before you get the chance. It dehusks nuts, picks nits out of green beans, combs through lettuce, pits peaches, slices and dices potatoes, and prepares poultry. The company does everything to make sure your chicken dinner is processed to perfection.

Founded 60 years ago as a maker of vegetable processing equipment, Key has morphed into a global supplier to the food industry. It melds electro-optical automated inspection and sorting systems with processing systems that include conveyors and preparation equipment to pinpoint and eject unacceptable matter in the food flow. Its systems improve product yield and quality over manual sorting and defect removal, saving on labor costs.

The biggest markets for Key are processors of potatoes (mostly French fries), vegetables, fruit and snack foods. The French fry is king, representing 90% of the more than eight billion pounds of frozen potato products processed annually in the United States. The expansion of American-style fast food chains in other countries is fast turning others into French fry fanatics and opening avenues for Key. The company also cleans and processes tobacco, and is successfully selling into the emerging pharmaceutical and nutraceutical industries. Indeed, Key believes there are many additional applications for its systems in both food and non-food markets.

Mastering the food chain has its rewards. Key closed fiscal 2007 on Sept. 30 with annual sales of $107.5 million, up 27% from the previous year. Earnings were $1.37 per diluted share, turning around a loss of $0.15 in fiscal 2006. Key topped the year with a first-rate fourth quarter, exceeding the expectations of the one analyst who covers the company. Earnings were $0.42 per share versus a loss of $0.11 in the year-ago quarter. Revenues were $31.7 million, up 31%.

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.