Tag - Lvlt

Small-cap stocks opened higher, briefly slipped into negative territory, then climbed back to flat levels in the first 30 minutes of trading. Some pressure was linked to disappointment over the lack of a big stimulus announcement out of the G-20 meeting, a decline in worldwide stocks overnight, and a mild rise in Libor rates. However, a better than expected result on industrial production helped limit the initial damage.  Today's biggest small-cap gainers are China Southern Airlines Co. Ltd. (NYSE:ZNH), Level 3  (Nasdaq:LVLT) and General Motors (NYSE:GM).

Other Market Watch highlights included:

• Energy and commodity stocks have been a big drag on the market in recent weeks, but are oversold.
• Crude oil prices rallied back into positive territory after being down about $1 a barrel earlier this morning.  
• Stock index futures bounced off the lows right before the opening when the industrial production report came in at plus 1.3%.  
• Small caps opened higher, briefly slipped into negative territory, then climbed back to flat levels in the first 30 minutes of trading.  
• The chart retains a bearish slant, is now trading on intraday charts between a double bottom off the recent lows, double top on highs.  

Small Cap Gainers:

• China Southern Airlines Co. Ltd. is up 12% on news that Chinese airlines were asking the government for aid to deal with rising costs and sinking demand. See (NYSE:ZNH).  
• Level 3 plans to raise up to $400M from offering; shares pop 9.2% in pre-market. See (Nasdaq:LVLT).
• General Motors to sell 3% stake in Suzuki for $230 Million, Financial Times Reports. GM Up 6% in pre-market. See (NYSE:GM).
• Vimicro International up 3% in pre-market after reporting Q3 results on Friday. See (Nasdaq:VIMC).  

Small Cap Losers:

• Dryships Inc. treads 2.85% lower in pre-market; shares have dropped about 90% within the last 52 weeks. See (Nasdaq:DRYS).
• United Therapeutics down 30% in pre-market after oral PAH drug fails trial. See (Nasdaq:UTHR).  
• Retalix Ltd. tumbled 28% as the retail software distributor reported earnings. See (Nasdaq:RLTX).  
• A-Power Energy Generation Systems down 12% in pre-market on very light volume. See (Nasdaq:APWR).
• Canadian Solar down nearly 7% in pre-market after Collins Stewart downgraded the solar cell manufacturer to "hold" on Friday. See (Nasdaq:CSIQ).  

Putting an optical fiber network together is like wiring a non-stop talker: each component must join to the others, a matrix of cables and synapses that transport information impulses and spew them out the mouth. Infinera Corp. (NASDAQ:INFN) is like that. It is racing toward profitability and won’t stop until it gets there.

Infinera has lots to talk about. It plans to scale networks and increase bandwidth to handle growth in long-term telecommunications demand. It tells about the success of its DTN system, a digital optical communications system, and its unique technologies to address the $15 billion total optical market. And how it’s moving into new venues, such as dense wave division multiplexing (DWDM), which Infinera says is a $6 billion dollar market segment.

And it is not just talking, it’s doing. Infinera is selling DTN systems nearly as fast as it moves information. DTN uses Infinera’s photonic integrated circuit (PIC) technology, which receives 100 gigabits per second of optical capacity and incorporates functions of more than 60 discrete optical components into a pair of indium phosphide chips. That’s a mouthful, but believe the experts: it’s a lot of information, and it’s quick. 

Incorporated in 2000, Infinera shipped its first DTN system in 2004. In fiscal 2007 through December, revenues more than quadrupled those of 2006, reaching $246 million from $58 million. At the end of the first quarter, Infinera had 44 customers--telecommunications, cable and internet service providers--in the United States and overseas. Twenty-two percent of its sales were international, to China, France, Germany, Japan, South Korea and the United Kingdom...

The Russell 2000 (NYSE: IWM) gained ground for the second day in a row as investors digested the latest financial news. The small-cap index advanced 2.07 points, or 0.27%, to 756.13. The Dow Jones Industrial Average (INDU) fell 25.20 points, or 0.19%, to 13,207.27.

On a year-to-date basis, the Russell 2000 is down 3.97%, while the Dow is up 5.87% and the S&P 500 has climbed 2.57%.

Small-cap stocks went on a rollercoaster ride today but eventually came out on top as investors were unsure what to make of the latest financial news.

The day began with news that Morgan Stanley (NYSE: MS) swung to a fourth-quarter loss due to $9.4 billion in mortgage-related write-downs. The New York-based company responded by saying that it will sell as much as 9.9% of itself to a Chinese sovereign fund for a cash infusion of $5 billion.

The move is similar to the one made by a number of financial heavyweights that posted losses on investments in securities that contain subprime home loans and then turned to foreign investors for a cash infusion to boost capital.

The difficulties stem from the slump in the U.S. housing sector, which began in the second half of 2006 when home prices started to fall. That led to a wave of foreclosures and delinquencies that hit borrowers with subprime loans particularly hard and damaged the financial institutions that had purchased securities backed by those same loans.

As a global credit squeeze took hold, the U.S. Federal Reserve responded by lowering the federal funds rate, the rate at which commercial banks make overnight loans to each other, and creating a Term Auction Facility (TAF) program to auction term funds to depository institutions against collateral that can be used to secure loans.

The first of those auctions was on Dec. 17, and today the Fed announced that it gave $20 billion at an interest rate of 4.65%. The auction attracted 93 bidders that asked for a total of $61.55 billion, a sign that banks are hungry for money to improve balance sheets and boost liquidity.

The Russell 2000 (NYSE: IWM) is little changed this afternoon. At 2:47 p.m. ET, the small-cap index had added 2.57 points, or 0.34%, to 756.63. The Dow Jones Industrial Average (INDU) was up 30.24 points, or 0.23%, to 13,262.71.

The day began with news that Morgan Stanley (NYSE: MS) swung to a fourth-quarter loss due to $9.4 billion in mortgage-related write-downs. Like many of its peers facing similar circumstances, the New York-based financial services giant responded by saying that it will sell as much as 9.9% of itself for a cash infusion of $5 billion. In this case, help came from a Chinese sovereign fund.

Investors were apparently unsure what to make of the news, because the Russell 2000 opened with a decline but quickly moved higher, only to fall again at about 11:30 a.m. ET along with the Dow. At about 2 p.m. both indices rose again.

In other financial news, the U.S. Federal Reserve announced after the start of trading that it auctioned $20 billion in a special operation at an interest rate of 4.65%. The auction, which was held on Monday, saw 93 bidders ask for a total of $61.55 billion, a sign that commercial banks are thirsty for money to help their balance sheets and improve liquidity.

The auction was part of the Fed’s previously announced plan to alleviate the global credit squeeze with periodic lending of funds. Also participating are the Bank of Canada, the Bank of England, the European Central Bank and the Swiss National Bank.

The Russell 2000 (NYSE: IWM) is just above the flat line as investors react to the latest financial news.
 
At 10:41 a.m. ET, the small-cap index had added 1.98 points, or 0.26%, to 756.04. The Dow Jones Industrial Average (INDU) was up 55.44 points, or 0.42%, to 13,287.91.

The futures were little changed this morning on news that Morgan Stanley (NYSE: MS) swung to a fourth-quarter loss due to $9.4 billion in mortgage-related write-downs. Quarterly net revenue was a negative $450 million, compared with a positive $7.85 billion a year ago.

The New York-based financial services giant responded by saying that it will sell as much as 9.9% of itself to a Chinese sovereign fund for $5 billion.

The move is similar to the one made by a number of financial heavyweights that posted losses on investments in securities that contain subprime home loans and then turned to foreign investors for a cash infusion to boost capital.

Today’s news once again highlights the wide reach of the contagion from the subprime mortgage crisis and its ability to infect the largest of financial actors. But the bulls will take solace in the fact that cash infusions will allow the wounded companies to continue their operations.

Elsewhere, a report by the Mortgage Bankers Association showed that mortgage applications for the week ended Dec. 14 decreased 19.5% on a seasonally adjusted basis.

The Market Composite Index was 653.8, compared with 811.8 a week earlier. The four week moving average, a more stable measure, is down 1%.

Stagnating home prices and tighter lending standards have made many Americans unwilling or unable to purchase homes, further contributing the slump in the U.S. housing sector. The ailing housing sector is one of the major factors dragging down U.S. economic growth.