Tag - Mer

Small-cap stocks resumed the downdraft Wednesday morning, pulled down by lingering worries about the health of the financial system and a bleak report on the U.S. housing market. At 10:01 a.m. ET, the Russell 2000 (NYSE:IWM) was down 12.51, or 1.76%, at 698.14.

Housing starts in August tumbled to a rate of 895,000 units, which was well below the forecast of 950,000 and represented the weakest level in more than 17 years. Single-family home sales were off 1.9% to 630,000 units, also the lowest level since 1991, and even permits for new homes were at 17-year lows. The market was already in retreat mode ahead of the data, but certainly didn’t find any ray of sunshine in the latest look at the housing market.

Even before this morning’s housing report came out, the market was in a selling mood, as investors fretted about the never-ending credit crunch and where the next ax would fall. The government bailout of American International Group (NYSE:AIG) might have been a welcome sign fueling Tuesday’s recovery bounce, but the news seemed to have a fairly short bullish shelf life. Arguments on the bearish side of things center around the fact that if the government had to produce the bailout then it wasn’t that attractive of a safety move and also on to concerns that regulators clearly won’t be able step in to and rescue every firm that is listing toward default amid a mountain of bad debt write downs and other failed investment strategies.

Investors were once again nervous about taking on equity risk and money was clearly flowing back into credit instruments. The interest rate on benchmark 10-year notes tumbled 0.64% and bond yields were off 1.40% as money moved into . . .

Small-cap stocks staged a solid recovery rally Tuesday, climbing more than 4% off the morning low as investors turned off the panic switch on financial worries, while bargain hunters took a dive back into the market and short-sellers took profits. While that might not be the optimal scenario for stock market stability, it was still a welcome sign for a market that seemed to be teetering on the edge. For the day, the Russell 2000 (NYSE:IWM) was up 20.89, or 3.03%, at 710.65. Just one day after the worst performance of the year, the Russell mounted the best one-day gain since July 16, which underscores the manic volatility in play in equities right now.

After posting the largest one-day slide since the 9/11 attacks, the Dow pushed higher Tuesday, rising 1.30% and the S&P 500 was up 1.75%. For the year, the Dow is down 16.6%, the S&P 500 off 17.3% and the Russell down 7.2%.

The Federal Reserve decided not to cut short-term interest rates, even though the market gave the policy makers a green light to do so, pricing in overwhelming odds for a rate cut (via Fed funds futures) ahead of today’s FOMC policy meeting. Even though some might have been disappointed that the Fed didn’t come charging to the rescue with easier money, the market overall seemed satisfied that the policy body was ready to keep bullets in the holster for later should they be needed.

“The FOMC’s decision reflected their belief that it is not the cost of credit that is causing the current financial turmoil, but the availability of credit and liquidity,” Steven Wood, chief economist with Insight Economics, said in an email. “The Fed is trying to address this availability problem through the variety of liquidity facilities that they have put in place over the past 10 months. The Committee is clearly keeping a watchful eye on both the current financial turmoil and the increased downside risks to economic growth. Although inflation remains uncomfortably high, it has moved to the back burner given the immediacy of the financial and growth concerns. With inflation beginning to ease, and the economy in some difficulty, the Fed is now more likely to cut rates than raise them. We expect at least one rate reduction before . . .

Small-cap stocks collapsed Monday, generating the largest one-day decline of the year as investors seemingly lost confidence in the financial arena and their wrath was felt throughout nearly every corporate endeavor in the country. The Russell 2000 (NYSE:IWM) shed 30.50, or 4.23%, to 689.76, the lowest daily close since mid-July.

Just a month ago, small caps came within a whisker of moving into positive territory for the year. Now, the Russell is down 9.9% for 2008, while the Dow is off 17.6% for the year after tumbling 4.4% Monday and the S&P 500 is down 18.7% on the year, while shedding 4.6% Monday.

The headline news this morning was that the nation’s fourth-largest investment bank, Lehman Brothers Holdings Inc. (NYSE:LEH), would declare bankruptcy as the firm simply could not raise enough capital to counter massive losses tied to the credit crisis. This time around, the Federal government decided to let Lehman’s fate be decided by true market forces rather than to step in for yet another taxpayer infused bailout of a financial firm. The realization that Uncle Sam’s pockets only run so deep for these institutions mired in mountains of bad debt jolted shares in major financial corporations. American International Group Inc. (NYSE:AIG) seems to have assumed the unenviable position of the next firm with a target on its back — sinking 56% today, adding to massive losses already pinned on the firm in recent weeks.

News that the second-largest bank — Bank of America Corp. (NYSE:BAC) — would purchase massive investment bank Merrill Lynch & Co. (NYSE:MER) for some $50 billion was good news to MER, which rallied some 4%, but not necessarily embraced by BAC shareholders as the bank’s shares slumped 19%.

This September swoon has to be making market watchers long for the days when the biggest worries centered on whether or not crude oil prices were going higher. If you would have predicted six weeks ago that the stock market would fall apart while crude oil was busy losing nearly 50% of it’s value, people would have thought you were nuts. Not only has that come to fruition, but today’s epic collapse took hold . . .

After opening sharply lower, small caps continue to be rattled by Lehman Brothers’ weekend bankruptcy filing, Bank of America’s (NYSE:BAC) surprise acquisition of Merrill Lynch (NYSE:MER) and AIG’s unstable liquidity position. 

At 12:00 p.m. ET all indices remained in the red, though the Russell 2000 has come off its session lows. The small-cap index is down 14.12 or 1.96%, to 706.14, the Dow plunged 302.64, or 2.65%, to 11,119.35 and the tech laden Nasdaq fell 31.36, or 1.62%, to 2,224.67.

Financial jitters remain off the charts as stocks crumbled in light of the Federal Reserve’s decision to allow investment bank Lehman Brothers (NYSE:LEH) to fail. After a drawn out uphill battle against overexposure to subprime loans and a 94% plunge in share price this year, Lehman Brothers will close its doors.

“The U.S. government can’t and should not bail out every large financial institution that’s out there,” said BMO Capital’s Andy Busch. “Lehman had a lot of time to do everything in their power to show that this didn’t happen and they made the decision not to. The United States made the right decision not to be involved with that. At some point they needed to make the critical decision to do something like this … this doesn’t necessarily mean it’s a bottom to be formed for financial stocks, though it certainly takes us one step closer to that point. The ultimate harbinger is when housing prices end up bottoming.”

In line with Bank of America’s (NYSE:BAC) historical strategy, the financial services goliath bought strained, 94-year old Merrill Lynch for $50 billion in a surprise transaction over the weekend. The addition of Merrill gives the Charlotte, N.C.-based bank exposure to roughly every slice of the financial services industry. Shares of Merrill bolted 19% midday, while Bank of America's shares sold off 16%.

The future of Merrill and Lehman’s employees remains undecided. “The biggest losers in all this are the employees of Lehman, people who had had their life . . .

Small-cap stocks staged a dramatic opening slide, as the market nervously tried to price in news this weekend that Lehman Brothers Holdings Inc. (NYSE:LEH) filed for bankruptcy. At 10:04 a.m. ET, the Russell 2000 (NYSE:IWM) was down 14.57, or 2.02%, at 705.69.

The entire financial system was seemingly under fire as the LEH news became the latest casualty of the ongoing credit crunch. What made this go-around different than previous debacles at Bear Stearns and Fannie Mae (NYSE:FNM) is that the government was unwilling to once again bail out the firm in question, which forced LEH to announce the bankruptcy filing this weekend.

Despite these new storm clouds on the financial horizon, there was still some talk about the market making a “capitulation” low today. Some traders also noted that while a LEH bankruptcy might have been a worst-case scenario, it certainly isn’t that much of a shock given what took place at the firm last week. Also, news that Bank of America (NYSE:BAC) was buying Merrill Lynch & Co. Inc. (NYSE:MER) didn’t seem like bearish news (although the initial reaction from BAC shareholders wasn’t exactly a warm embrace as the stock tumbled 16% shortly after the open).

Another firm that was in the crosshairs of bears last week and remained on the hotseat this morning is American International Group Inc. (NYSE:AIG), as stock in the world’s largest insurer tumbled some 40% early today, after hitting the skids last week as well.

Even though the Treasury Department and Federal Reserve decided not to earmark taxpayer funds to bail out Lehman, central banks around the world were adding liquidity into the system to help the markets ride out this morning’s selling storm. This latest calamity adds even more zest to the FOMC policy meeting Tuesday afternoon — with some market watchers now wondering if a rate cut has gone . . .

Small-cap stocks are expected to open sharply lower this morning following the lead of Asian and European markets. U.S. stock index futures are down 2.5% to 3.5% in pre-market trading.

The weekend bankruptcy filing of U.S. investment bank Lehman Brothers Holding Inc. (NYSE:LEH) combined with the acquisition of Merrill Lynch & Co. (NYSE:MER) by Bank of America Corp. (NYSE:BAC) rattled global markets. Fears about the stability of other major financial institutions are widespread this morning. Many traders will be watching the stock of American International Group Inc. (NYSE:AIG), which is trading 40% lower in pre-market transactions. AIG tumbled after The New York Times reported the insurer asked the Fed for a $40 billion bridge loan. Speculation is widespread this morning that credit agencies may downgrade the debt of American International Group Inc. Over the weekend AIG rejected an offer from J.C Flowers & Co. that would have given the buyout firm an option to acquire the entire company.

Two-year Treasury notes fell below 2% for the first time since April on speculation the Federal Reserve will need to lower interest rates to bolster financial institutions battered by $514 billion of credit losses and asset write-downs from the subprime-mortgage market's collapse. Gold, up 2%, is one of the only commodity markets trading higher this morning. Oil is trading over $6 lower, while the dollar dropped the most in a decade against the yen and fell versus the euro, pound and . . .

Small-cap stocks edged higher Thursday, shrugging off steep morning declines tied to the credit crisis as gains in commodity, manufacturing, transportation and tech stocks shifted focus away from the perilous financial landscape. In the end, the Russell 2000 (NYSE:IWM) closed up 1.83, or 0.26%, at 719.00; meanwhile, the Dow was up 1.46% and the S&P 500 was up 1.38%. For the year, small caps are still holding up much better than their big-cap brethren, with the Russell down 6.1%, the Dow off 13.8% and the S&P 500 down 14.9%.

At one point early this morning, the Russell was down more than 2% and appeared on the verge of a calamitous downside breach of key “figure” support along the 700 line. However, buyers came back into the market, braving not just fears about fragility in the financial arena, but also looking past a fresh batch of worrisome economic data as well. Tech stocks were clearly the early bedrock of the bulls, with the Nasdaq 100 never showing the kind of morning worries that seized other index products.

A key part of the mid-morning climb off those scary opening lows was yet another intriguing rally in commodity stocks, a rally that lately has defied price action in the physical market. However, as the day progressed, leadership on the buy-side shifted into the manufacturing, transportation and internet side of things. For the day, crude oil prices tumbled $1.71 a barrel to $100.87, while dipping to the lowest intraday point since April. In an interesting side note, the Commodity Futures Trading Commission today said that they could not say that speculators were to blame for the surge in oil prices this summer.

The sell-off in commodity markets was fairly broad in scope, pressured by a rise in the U.S. dollar, which made new multi-month highs against the euro, and 2 ½-year highs against the U.K.’s pound sterling. Normally, it would be convenient to highlight currency strength as a sign of international interest in U.S. assets, but the story appears to be primarily one of concern about global growth — particularly out . . .

Small-cap stocks plunged on the opening, pulled down by worries about the credit crisis, which are taking a toll on financial stocks. A fresh batch of economic data this morning did nothing to ease the pain as the labor market continues to struggle against a backdrop of worry about global growth slowing. At 9:52 a.m. ET, the Russell 2000 (NYSE:IWM) was down 15.27, or 2.13%, at 701.90.

Financial shares have continually been dogged by the credit crunch over the last year, and as soon as things seem to cool down on that front, a new crisis emerges. The latest poster child for the debt debacle is Lehman Brothers Holdings Inc. (NYSE:LEH), as the firm appears to be getting snowballed under losses, is struggling to raise capital via finding investors and has seen its debt swaps widen dramatically, which makes it more difficult to fund borrowing efforts. LEH debt is now trading near distressed levels and the stock was off a whopping 38% shortly after the opening, trading near $4.30, a far cry from the $66 level it was trading at back in February. Another firm reeling from the mortgage-tied credit crisis is Washington Mutual Inc. (NYSE:WM), which was off 21% early today. Also, American International Group Inc. (NYSE:AIG) was down 12%, as was Merrill Lynch & Co. Inc. (NYSE:MER).

On the data front this morning, the weekly unemployment claims release came in at 445,000, which was above the consensus forecast of 438,000. Perhaps more importantly than the headline figure was the continuing claims number, which was 3.52 million, near a 5-year peak. At the same time that the claims number came out, data on international trade showed a jump in the U.S. trade deficit to $62.2 billion, well above the forecast for a deficit of $58 billion. The dreary data simply added to an already bleak morning picture for equities. Even before this morning’s claims report, analysts at Goldman Sachs said earlier this week that the slumping U.S. labor market reflected an economy that was in recession, regardless of how the “official” . . .

Small-cap stocks closed higher Friday, finishing off a volatile week on a “good news/bad news” tilt as concerns about global growth and slumping labor markets in the United States took a toll for the week, but didn’t stop an impressive recovery for the day Friday. The big news today was that the unemployment rate in America jumped to 6.1%, which marked the highest level in nearly five years. The Russell 2000 (NYSE:IWM) closed up 0.23, or 0.03%, at 718.95 and is now down 6.1% for the year.  For the week, the Russell was down 2.8%. Meanwhile, the Dow was up 0.29% for the day and is down 15.4% for 2008, while the S&P 500 was up 0.44% Friday and now 15.3% lower for the year.

Despite the preponderance of bearish news on the data front this morning, the stock market staged a fairly heroic comeback from the morning lows, powered by a recovery in financial shares, which have beaten down in recent weeks and months. The PHLX KBW Banking Index rallied 4.1%, and the Financial Select Sector SPDR Index rose 2.8%, while key stocks like Citigroup Inc. (NYSE:C), Lehman Brothers Holdings Inc. (NYSE:LEH) and Bank of America Corp. (NYSE:BAC) all posted gains of 4% or more. Even investment banking firm Merrill Lynch & Co. Inc. (NYSE:MER) generated an impressive recovery from the morning lows despite suffering an analyst downgrade by rival Goldman Sachs.

The highly anticipated monthly employment report projected an ugly picture of the labor market, no matter how anyone might try to spin the numbers. Most market watchers were looking for the jobless rate to hold steady in August at 5.7%, or perhaps tick up to 5.8% at the worst … but soaring above 6% was a sobering thought for all. In addition to the dreary jobless news, the headline figure on non-farm payrolls tumbled 84,000 jobs, which was a tad below the forecast for a loss of 71,000 jobs.

“So far this year, 605,000 jobs have been lost. The economy has clearly slipped into a jobs recession because the housing meltdown and credit market turmoil has spread to the broader economy,” Steven Wood, chief economist with Insight Economics, said in an email. “Over the past year, the number of unemployed people has increased by more than 2.24 million and the unemployment rate has increased by 1.4 percentage point. In the post World War II period, every time the unemployment rate . . .

Small-cap stocks slumped this morning, extending the rout from Thursday’s session as investors woke up to the harsh news that America’s unemployment rate was approaching five-year highs. At 9:50 a.m. ET, the Russell 2000 (NYSE:IWM) was down 4, or 0.56%, at 714.62.

On Thursday, small caps collapsed, generating the largest one-day loss since early January, but the market still had bearish bullets in the holster after today’s dreadful employment report from the Labor Department. The jobs data showed that the nation’s unemployment jumped to 6.1% from 5.7% (the market was expecting the rate to hold steady), which was the highest point since December 2003. In addition, the headline figure on non-farm payrolls came in at a loss of 84,000 jobs, which was worse than the consensus estimate for a decline of 71,000 jobs. This marked the eighth consecutive monthly decline in payrolls, which hasn’t happened since the 2001 to 2002 time frame when the economy was emerging from recession.

“So far this year, 605,000 jobs have been lost. The economy has clearly slipped into a jobs recession because the housing meltdown and credit market turmoil has spread to the broader economy,” Steven Wood, chief economist with Insight Economics, said in an email. “Over the past year, the number of unemployed people has increased by more than 2.24 million and the unemployment rate has increased by 1.4 percentage point. In the post World War II period, every time the unemployment rate has jumped by a full percentage point or more in the course of a year, the economy has been in a recession.”

Crude oil futures were down about $1 dollar a barrel before the jobs report, but climbed back toward steady prices as the dollar retreated off overnight highs against the euro, and tumbled versus the yen. In overnight trading, copper prices hit a seven-month low in Europe, but since copper is considered a key economic indicator, it’s actually one of those commodity markets that investors aren’t that . . .

Small-cap stocks are expected to open lower, pulled down by dreary jobs data, as the unemployment rate spiked to nearly a five-year high as more jobs than expected were shed across the country. The Russell 2000 (NYSE:IWM) was down about 0.8% in after-hours trading, which would suggest a regular open near 712.75.

The jobs report headline figure for non-farm payrolls declined 84,000, which was worse than the consensus forecast for a slide of 71,000. In addition, the unemployment rate was pegged at 6.1%, which was well ahead of the 5.7% projection. This marked the highest jobless rate since December 2003.

Stock index futures immediately tumbled some ten additional handles when the numbers came out, as the initial shock of the unemployment rate sparked a wave of selling. Also, the U.S. dollar slipped after the report. Ahead of the jobs release, the greenback was on a roll, storming to fresh move highs against the euro, the highest point since October 2007. However, the dollar continues to waffle versus the yen, and was actually down about 0.6% before the report, and extended those losses to 1.3% immediately after the data.

Large caps in the spotlight overnight include investment bank/brokerage firm Merrill Lynch & Co. (NYSE:MER) as rival investment bank Goldman Sachs was . . .

Small-cap stocks reversed course Thursday, pulling back into the recent range as the credit crisis moved to the forefront, punishing financial stocks. The selling mood was also stirred by soft economic data and worries about consumer spending after sluggish sales at benchmark retailer Wal-Mart Stores (NYSE:WMT). In the end, the Russell 2000 (NYSE:IWM) shed 12.48, or 1.72%, to 713.42.

Large-cap financial stocks were getting hammered in the afternoon today, extending a gloom that began after Wednesday’s close when insurance giant American International Group (NYSE:AIG) reported hefty quarterly losses amid write-downs of bad mortgage loans. The whole mess with AIG rekindled fears about the credit crunch and investors dumped shares in a wide swath of financial names. AIG tumbled some 18% on the day. The nation’s top bank, Citigroup Inc. (NYSE:C) stumbled amid news that the firm would buy back some $7 billion in auction-rate securities and pay a $100 million civil fine to settle a suit that it misled investors on the risk of the investments. Citigroup lost about 6% on the day. Merrill Lynch & Co. (NYSE:MER) lost 8%, Lehman Bros. Holdings, Inc. (NYSE:LEH) tumbled 13%, JP Morgan Chase Co. (NYSE:JPM) was down 4% and mortgage finance firms Fannie Mae (NSE:FNM) and Freddie Mac (NYSE:FRE) were down 14% and 9%, respectively. The Financial Select SPDR was down 5%--and it’s not as if those declines are limited to the large-cap banks and brokerage houses. There are dozens of small- and mid-cap banks out there, and they have even more trouble accessing credit during the crunch than the big firms.

As you might expect...

Small-cap stocks had an up and down session, grappling with the promise of an upbeat private employment survey versus the reality of a sudden updraft in energy prices. In the end, the Russell 2000 (NYSE:IWM) closed up 4.31, or 0.60%, at 718.86.

Small-cap stocks and tech stocks noticeably lagged the Dow and S&P 500, both of which benefited more from a jump in financial and consumer product large caps as well as money moving into big energy names. Exxon Mobil Corp. (NYSE:XOM) rallied 4% as energy markets staged a sharp recovery rally.

Crude oil prices shot some $4 dollars a barrel higher today, reversing course from recent sharp declines. The buying frenzy was set off when the weekly inventory tally showed a surprising drop in gasoline stocks. While a boon to some energy stocks, the jump in crude prices sent a chill through the overall stock market.

On the financial side of things, large caps embraced news that the Federal Reserve would extend access to its primary dealer credit facility window through Jan. 30, which helps to access cheap money needed to combat the credit crunch and raise low-cost capital amid debt write-downs. In addition, President Bush inked the rescue plan for mortgage financing firms, which will support Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE), as the two firms own or guarantee nearly 50% of the country’s $12 billion in home mortgage debt. While both FNM and FRE posted solid gains today, they finished well off the morning highs. The SEC also extended a short-selling curb through Aug. 12, so when you combine that with the Fed extending the credit facility and the White House stamping approval on GSE funding measures, it sends a pretty clear message that government officials want to stabilize the financial landscape. Investors could easily see through that message and as a result, several large-cap financial firms were attractive to buyers today. Merrill Lynch (NYSE:MER) was up 2%, Bank of America (NYSE:BAC) up 3% and Citigroup (NYSE:C) up nearly 2%.

The day started off with an unexpected bullish surprise as the ADP Employment Report showed a stunning increase in non-farm payrolls of 9,000 jobs in July, which . . .

Small-cap stocks are expected to open higher, underpinned by surprisingly stout employment figures on this morning’s ADP Employment Report. The Russell 2000 (NYSE:IWM) was up about 0.3% in after-hours trading, which suggests an open near 716.50.

The ADP headline figure for non-farm payrolls came in at plus 9,000 jobs, which was a big surprise over the projection for a decline of 58,000 jobs. The immediate market response to the ADP report was a rally in the U.S. dollar, a decline in Treasury futures and a four-handle upside pop in S&P 500 futures. Although the ADP report has been less accurate in forecasting the Labor Department’s monthly employment release over the last year, the move into a positive number should provide a little more optimism about the employment picture heading into Friday’s big report.

Also on the data front, the MBA Mortgage Applications Survey came out this morning and was down 14.1 to the lowest level since December 2001. The combination of weak home sales and slumping home equity continue to take a toll on mortgage applications.

Crude oil futures were hovering near $122 dollars a barrel this morning, down just a tad from Tuesday’s close and basically marking time ahead of the weekly inventory report later this morning, which is expected to show a 200,000-barrel . . .

Small-cap stocks went into rally mode Tuesday, quickly reclaiming lost ground from Monday’s downward spiral as crude oil tanked and consumer sentiment perked up from the abyss. The Russell 2000 (NYSE:IWM) closed up 18.44, or 2.65%, at 714.55, generating the 10th-largest one-day rally of the year. This also marked the fourth one-day gain in July of 2% or more. The only other month this year that saw that many 2% rally days was in March — when the market forged an important bottom.

During the session, crude oil prices shed more than $3 dollars a barrel, retreating below $121 while approaching three-month lows. By the close, crude was off $2.54 dollars to $122.19. Concern about the demand side of the equation continues to discourage energy bulls, and OPEC president Chakib Khelil said that crude oil prices could tumble to the $70- to $80-range if the U.S. dollar strengthens and if political tensions ease in the Middle East. The U.S. dollar jumped to four-week highs against the euro, heating up talk that the short dollar/long energy hedge fund trade was still being unwound. The greenback was on a roll against the yen, rising to four-week highs, while gaining about 0.6%.

The recent collapse in crude oil prices (crude is off some 17% from the July peak) has been a welcome sign to stock market investors who worried that persistent gains in the energy market would have crippled consumer spending and thwarted any recovery attempts in the U.S. economy — especially with the housing market still reeling.

Speaking of the housing situation, the Case-Shiller Home Price Index came out today. To no one’s surprise, the Index slipped to record low levels and suggested that home prices were at four-year lows. However, the report was in line with expectations, the data is for the May time frame, and was completely overshadowed by the consumer confidence report, which came in well above expectations. The headline figure for consumer confidence was at 51.9, which easily topped the analyst forecast of 50. It should be noted that 51.9 is still a low number historically, but with crude oil sinking, the dollar surging and several key economic numbers still on tap this week, a good sentiment figure simply made it even more difficult for the shorts to . . .

Small-cap stocks pushed higher, recouping some of Monday’s big decline amid lower crude prices and positive economic data. At 10:03 a.m. ET, the Russell 2000 (NYSE:IWM) was up 9.95, or 1.43%, at 706.06.

The consumer confidence report came out at 51.9, which was above the forecast of 50 and which sparked a quick jump in the U.S. dollar while extending the morning rally in equities.

Earlier this morning, the Case-Shiller Home Price Index slipped at a record pace to minus 15.8% in May, which wasn’t a surprise to the market, but is sobering news to home owners who have seen four years of home equity wiped out during the recent downturn in housing.

Crude oil futures were pushing lower this morning, which provided some support to the stock market. The market for black gold was off nearly $2 dollars a barrel into the U.S. stock market open, backing down below $124 amid concerns about the demand picture. OPEC president Chakib Khelil said that current prices for crude were “abnormal” and that prices could fall to $70 to $80 dollars in the long-term picture if the U.S. dollar strengthens and political tensions ease. The greenback was up this morning about 0.6% against both the euro and the yen.

Traders will keep a close watch on the financial arena again today following news overnight that Merrill Lynch (NYSE:MER) announced plans to write-down $5.7 billion in debt and raise $8.5 billion in capital through new stock sales. Shortly after the open, MER shares were down 1%. Also within the financial spectrum, Citigroup (NYSE:C) was the target of negative analyst comments overnight and slumped 2.5% on the open.

Coming into the opening today, stock markets around the world were on tilt, sinking to two-week lows as the MER news sparked renewed fears about the credit crunch. Although European shares bounced off the lows, they were hit hard at times overnight, and Asian markets had a decidedly bearish result, with Japan down 1.4%, Hong Kong down 1.8%, China down 1.8%, Taiwan down 3.0%, Australia . . .

Small-cap stocks are expected to open higher, underpinned by a dip in crude oil prices overnight, a bounce off the lows in European stock trading and a consolidation breather after Monday’s big loss. The Russell 2000 (NYSE:IWM) was up about 0.5% in after-hours trading, which suggests an opening near 699.50.

European markets tumbled during overnight trading, spiraling lower after Merrill Lynch (NYSE:MER) reported another big debt write-down, which rekindled fears that the credit crunch still has plenty of room to unravel further. After the close Monday, MER said it would absorb a $5.7 billion write-down in the third quarter, and would raise $8.5 billion by selling new stock. Also, in the financial arena, Citigroup (NYSE:C) shares took a dive overnight as analysts lowered the 2008 outlook for the nation’s top bank. Interestingly, outside of Citigroup, several large name financial firms were in the green heading toward the open, and even MER pulled back toward flat levels.

Crude oil prices were off about $0.70 a barrel during European trading near the $124 level, which should provide a little bit of a cushion for stock market bulls into this morning’s consumer confidence release, which comes out at 10:00 a.m. ET. The U.S. dollar was also firm, up about 0.2% against both the euro and the yen.

Elsewhere on the large-cap earnings front, Amgen (Nasdaq:AMGN) was in rally mode overnight after topping the estimate, just a day after the drug-maker shot higher on news of a successful osteoporosis trial.

Looking at the chart picture, short-term resistance on a bounce today comes in at 701, 707.50 and 715. If the market resumes Monday’s downward spiral, . . .

Small-cap stocks are expected to open higher, still riding a wave of better-than-expected earnings results, while basking in the glow of a sharp pullback in crude oil prices this week. The Russell 2000 (NYSE:IWM) was up sharply in after-hours trading, well ahead of the pace in other index products and is expected to open near 700.50.

Although crude oil prices have collapsed some $16 dollars a barrel this week, they were higher overnight, rising about $1.50 dollars back above $130, which is no surprise ahead of a weekend. As long as crude oil doesn’t rally much more during the session today, it should allow investors to focus on earnings numbers.

Speaking of earnings, the news on major large-cap issues was mixed overnight, but traders seem to embrace the good news over the bad. The good was highlighted by Citibank (NYSE:C), as the nation’s largest bank posted a smaller-than-forecast loss and jumped well over 5% in overnight trading. Also, Schlumberger (NYSE:SLB) was up about 3% as revenue topped expectations.

As for the bad, Merrill Lynch (NYSE:MER), the third-largest investment bank, tumbled about 3% overnight when earnings disappointed. Also, tech stocks Google (Nasdaq:GOOG) and Microsoft (Nasdaq:MSFT), were down in after-hours . . .

Acura Pharmaceuticals (Nasdaq:ACUR)
Palatine, Ill.
http://www.acurapharm.com

52-week low/high: $5.79/$27
Shares Outstanding: 42.72 million
Market Capitalization: $331 million

More than 75 million Americans suffer from pain — more than the number of people with diabetes, heart disease and cancer combined. Prescription medications exist; however, the abuse of such, especially by younger people, complicates physicians’ ability and/or willingness to treat pain. Enter Acura Pharmaceuticals (Nasdaq:ACUR), a company that specializes in prescription drug abuse deterrents. 

The company has seen broad-based institutional interest as of late. According to Nasdaq.com, seven new positions were initiated as of March 31, 2008 in Acura, while eight existing investors increased their positions. On the flip side, only one position was decreased and sold out. Those who initiated new positions as of March 31 were UBS (NYSE:UBS), Merrill Lynch (NYSE:MER), Black Rock (NYSE:BLK), Wells Fargo (NYSE:WFC) and Deutsche Bank (NYSE:DB).

The Palatine, Ill.-based firm specializes in development of opioid pain medicines using what it calls Aversion technology, which is a patented platform designed to develop pharmaceutical products that are intended to relieve moderate to severe pain and deter common methods of prescription drug abuse (injection, nasal snorting and intentional swallowing). Acura’s lead product candidate is acurox — orally administered release tablets with oxycodone to treat severe pain.

In fact, Acura in conjunction with pharmaceutical company King Pharmaceuticals (NYSE:KG) recently reported positive results for a phase III study on the acurox tablets and expects to submit a new drug application to the FDA for acurox tablets by year end.

Acura also has a license agreement with King to develop opioid analgesic products using the aversion technology (opioid is a chemical used in drugs for pain relief). The two are currently jointly developing three immediate-release opioid analgesics using the aversion technology.

The alliance with King, consummated in December 2007, has proven to be a sagacious move, as the company is already realizing revenue accretion. In 2008, Acura recognized $17.1 million in revenues, adding to a strong first quarter.

For the first three months ended March 31, 2008, the latest quarter for which results were available, the company reported net income of $7.4 million, or $0.15 per, compared with a net loss of $9.2 million, or $0.26 per share for the same quarter in 2007.

Drilling down further into the financials, the company has just closed in on profitability. Acura swung to a profit in the fourth quarter of 2007. The company began generating positive cash flows from operations in 2007 and has been steadily increasing its cash position. As of April 30, 2008, the company had cash and cash equivalents of approximately $30 million with no term indebtedness.

Gross margins are higher than the industry at 100%, while the industry sits at 69%. Operating margin was 39.17% compared with -19.84% for the industry.

Small-cap stocks are expected to slump on the open, pulled down by the deepening crisis among government-sponsored mortgage lenders and by another steep rise in crude oil prices overnight. Stock index futures were down about 1% during after-hours trading, which would suggest an open for the Russell 2000 (NYSE:IWM) near 663.50.

The freefall in mortgage firms Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) hit a fresh crescendo overnight, with FNM shares off 37% and FRE also tumbling about 37% on a New York Times story that said the U.S. government is considering a takeover of the staggering firms as the housing slump and credit crisis take a toll. The GSE tumult will likely cast a pall over the entire financial sector, and indeed, Wachovia Corp. (NYSE:WB) was off some 8% overnight and Merrill Lynch (NYSE:MER) was down about 2.5%.

Crude oil prices shot more than $3 dollars a barrel to the $145 zone, hitting a fresh record high and recovering $10 dollars in losses from earlier this week in dramatic fashion. Energy prices shot higher the last two days amid supply concerns out of Nigeria and Brazil, and by ongoing geopolitical tension in the Middle East. The sharp upturn in crude oil coincided with a decline in the U.S. dollar, which was down about 0.3% against the euro and about 0.7% versus the yen before the international trade data was released at 8:30 a.m. ET. The slide in the dollar was then extended modestly after the trade report came out. On the data front, the Michigan sentiment survey comes out later this morning around 10:00 a.m. ET, and could spark a . . .

Small-cap stocks pushed lower again Monday, unable to sustain a morning bounce fueled by sinking crude oil prices and oversold conditions. A decent recovery bounce in the final hour of trading lifted the market off the lows, but in the end, the Russell 2000 (NYSE:IWM) lost 7.51, or 1.13%, to 658.26, sinking to the lowest daily close since March 17.

Losses were likely magnified by a flight-to-quality away from stocks, with the yield on the benchmark 10-year note tumbling more than 2% at one point during the session to the lowest level since late May and the yield on the long bond was at the lowest point since late April before recovering in line with an afternoon bounce off the lows in stocks.

The inability for stocks to push higher in the face of a steep morning slide in energy prices brought with it a sobering reality: there are more things wrong with the market right now than just high crude oil prices.

Financial shares continue to plumb new lows as the credit crisis remains on the front burner. Overnight, bank stocks in Europe were sold off amid talk of further debt write downs and the need to raise capital to shore up balance sheets. Those worries clearly made it across the pond today as well, with the Financial Select Sector SPDR Fund sinking to six-year lows. The financial “spider” is now off 50% from the May 2007 record peak.

Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) were hammered today, both tumbling more than 14% amid talk that the nation’s largest provider of home mortgages will have to raise more capital to cover hefty losses. Other large-cap financial stocks taking a hit today included Lehman Bros. (NYSE:LEH), off some 7%, Merrill Lynch (NYSE:MER) down nearly 2%, Citigroup (NYSE:C), also . . .

Small-cap shares started out the second half of 2008 with a dramatic downward spiral, as the Russell 2000 (NYSE:IWM) tumbled through the official 20% bear market line, endangering the bottoming premise built off the March through June rally. However, a bullish surprise on manufacturing data sparked a big recovery bounce about 30 minutes after the open. At 10:05 a.m. ET, the Russell was down 1.26, or 0.18%, at 688.40.

The fuel for today’s bearish flurry came from a familiar source: rising crude oil prices and slumping financial stocks. In addition, safe haven money flow away from equities toward credit instruments, physical instruments and cash exacerbated the stock market slide.

The ISM Manufacturing Survey, released at 10:00 a.m. ET, came out at 50.2, which was above the forecast for a reading of 48.6. The upside surprise on the ISM data sparked a sizable recovery bounce in stock index products, with the Russell 2000 shooting some eight handles off the morning lows. It should be noted that although the headline figure was a nice upside surprise for manufacturing activity, the index of prices paid climbed to 91.5, which marked the highest reading since 1979.

Just ahead of the stock market opening, crude oil prices climbed back above $143 dollars a barrel, jumping some $3 dollars from Monday’s U.S. close. The rise in energy markets sparked investor buying in gold, as the yellow metal hit 10-week highs. In addition, the U.S. dollar was taking a beating against the yen, down 0.8%, which makes commodity goods priced in dollars more attractive to Asian investors and end users.

The story in crude oil gathered steam amid heightened geopolitical tension in the Middle East, as rumors of a potential attack on Iran’s nuclear facilities by Israel remain on the front burner. Iran has threatened to take action on shipping through the Straight of Hormuz if attacked, and approximately 40% of the world’s fuel supply moves through that waterway. In addition, the International Energy Agency . . .

Small-cap stocks collapsed Thursday, unable to muster a fight against tremendous headwinds from a dramatic slide in tech stocks and record-high crude oil prices. The Russell 2000 (NYSE:IWM) shed 17.88, or 2.50%, to 698.42, the lowest daily close since the tax man came calling April 15.

As far as intense selling episodes go, today’s unraveling marked the seventh-largest one-day point slide of the year and just the ninth time that the Russell generated a decline of 2.50% or more. While small caps were at the lowest point since mid-April, the Dow has been in a selling fury of late and now stands at the lowest level since September 2006. And while small caps were enduring a painful 2.50% loss today, the Nasdaq 100 crumbled more than 4%, so there were some minor signs of index related strength to be found for small-cap holders, but it was more of a “glass half empty” argument, at least for today.

The selling fury in tech stocks clearly spilled over into the entire market psyche, and was headlined by a 13.2% tumble in Research in Motion (Nasdaq:RIMM) shares, which gapped lower when the company lowered forward guidance and never looked back. In all fairness to the makers of the BlackBerry, their stock hit all-time highs just last week. Also on the tech front, software giant Oracle (Nasdaq:ORCL) slipped 5% despite decent quarterly results as the market focused on a gloomier outlook . . .

After plunging out of the gate this morning, small-cap stocks continue to bleed mid-session, besieged by a continued troubling outlook for financials, disappointing guidance by tech heavyweights, a lackluster outlook for the auto sector and a slowing economy —  all of which sparked concern for suppressed corporate earnings for the near foreseeable future.

At 1:19 p.m. ET, the Russell 2000 (NYSE:IWM) was down 16.70, or 2.33%, to 699.60, tumbling below a two-month low on April 22. The Dow skidded 241.58, or 2.05%, to reach a low for the year of 11,570.25, while the Nasdaq swooned 61.92, or 2.58%, to 2339.34.

Stocks are under pressure after Goldman Sachs downgraded the brokerage sector to “neutral” from “attractive,” citing a lack of positive catalysts going forward and eroding fundamentals. Goldman claims that investors are focusing more than needed on the possibility of another major bank collapse. The investment bank also downgraded Dow component Citigroup (NYSE:C) to “sell,” pushing the bank down 5% midday. Merrill Lynch (NYSE:MER) shares were off 4%, joining the weakness seen in financial shares after the opening.

Fresh concerns surrounding the health of the auto industry have also surfaced after Goldman Sachs lowered its rating on General Motors Corp. (NYSE:GM) to “sell” from “neutral,” sending shares sinking 10% mid-session.

The tech-heavy Nasdaq has been battered the most today, dragged down by disappointing guidance from tech juggernauts Research in Motion (Nasdaq:RIMM) and Oracle Corp. (Nasdaq:ORCL) Oracle posted solid quarterly results, but provided a cautious outlook for the next quarter. Shares for the third-largest software maker were off 3% early. Rim was downgraded by JMP Securities to market perform from market out perform today The blackberry maker said its revenue and earnings doubled, but issued a cautioned that earnings could come under pressure as it ramps up spending.

In economic news, GDP for the first quarter was upwardly revised to 1%, as expected. The figure is dated as we near the end of the second quarter, but does indicate that the economy did not slide into negative growth to start 2008. Weekly claims figures rose to 384,000 in the latest week, which was slightly above the forecast. Existing home sales clocked in better than expected at plus 2%, with an annual . . .

Small-cap stocks took a nosedive on the opening, knocked to the canvas by yet another rout in financial stocks and by a dramatic morning plunge in technology stocks. At 10:03 a.m. ET, the Russell 2000 (NYSE:IWM) was down 8.99, or 1.25%, at 707.31, reaching the lowest point since April 24.

The tech-laden Nasdaq 100 Index was off about 2% this morning, with big-name tech stocks like Research in Motion (Nasdaq:RIMM) and Oracle Corp. (Nasdaq:ORCL) leading a jolting slide in the tech arena to start the day. RIMM shares were off 10% as its forward guidance disappointed. Oracle reported solid quarterly results, but provided a cautious outlook for the next quarter. Shares for the third-largest software maker were off 3% early.

The selling mood was also fueled this morning by a steep climb in crude oil prices, which shot back above $138 dollars a barrel. Commodity markets look firm to start the day amid a soft tone in the U.S. dollar. Corn prices are called sharply higher, copper prices were up 1.5% overseas and aluminum prices are up 10% so far in June, which keeps nagging inflation fears right in front of the market at a difficult time for the economy and for interest rate policy makers.

Analyst downgrades also took a toll on stocks this morning as researchers at Goldman Sachs lowered its rating on General Motors Corp. (NYSE:GM) overnight to a “sell” from “neutral,” and the stock tumbled 10% shortly after the open. Goldman put Citigroup (NYSE:C) on its sell list and the nation’s top bank slumped more than 5% early. Goldman also slashed its rating on the brokerage industry, so those stocks could be under pressure this morning as well. Merrill Lynch (NYSE:MER) shares were off 4%, joining the weakness seen in financial shares after the opening.

Financial stocks were taking a hit overseas, with European bank Fortis sinking some 10% on news that it will cancel its dividend and raise capital. European stocks were also off more than 1% heading into the U.S. open, while Asia shares were . . .

Small-cap stocks ended the week with a whimper, pulled down by surging crude oil prices, an ongoing rout in financial stocks, sinking tech stocks and safe-haven money flow away from equities and into credit instruments. The Russell 2000 (NYSE:IWM) stumbled 12.10, or 1.64%, to 725.73, notching the second-largest one-day decline since June 6.

It’s probably no coincidence that the big decline exactly two weeks ago on June 6 also coincided with talk that Israel was developing plans to possibly attack Iran’s nuclear facilities, which sparked a rally in energy markets and also played into geopolitical tensions ahead of a weekend.

The reversal in crude oil prices meant that Thursday’s slide in energy markets was a very brief respite for consumer, airline and courier shares that have been mercilessly battered by soaring gasoline prices. The rise in crude oil was accompanied by a sharp decline in the U.S. dollar, which tumbled about 0.7% against both the euro and the Japanese yen.

Financial shares were under attack once again today following a downgrade in the outlook for banks by Merrill Lynch analysts. Citigroup (NYSE:C) was off 4.7%, Bank of America (NYSE:BAC) down 3.7% and Wachovia (NYSE:WB) off nearly 2%. Investment banks, brokerage firms and specialty trading houses were also under pressure, with JP Morgan (NYSE:JPM) down about 2%, Goldman Sachs (NYSE:GS) off 1.6% and Lehman Bros. (NYSE:LEH) down 1%. Small-cap firm MF Global (NYSE:MF) sank 22% and continues to reel in the face of analyst downgrades and slumping interest rate income from futures trades. Ironically, Merrill Lynch (NYSE:MER) itself was down 4.6%.

With the market taking a beating today and the crude oil market rising amid political concerns, the quarterly “quadruple witching” expirations shuffled into the background a little bit. That said, the market certainly was volatile today, be it from expirations or other factors. The NYSE said that short interest was at an all-time high, . . .

Small-cap stocks took a dive on the opening, pulled under water by yet another selling flurry in the financial sector, a recovery bounce in crude oil, declines overnight on international equities and safe-haven flow out of stocks into bonds. At 10:10 a.m. ET, the Russell 2000 (NYSE:IWM) was down 12.96, or 1.76%, at 724.87.

This morning’s whipping post for the financials was Merrill Lynch (NYSE:MER) and shares in the investment banking firm were down 5.2% shortly after the opening. The market seems to be rotating around various financial stocks, but the whole group is also being punished as investors shy away from the group amid the ongoing credit crunch. Rival investment banks Goldman Sachs (NYSE:GS) and JP Morgan (NYSE:JPM) were both in the red early today as well. Ironically, even as Merrill is a target for the bears this morning, their own analysts issued bearish news on several banks, forecasting dividend cuts and lowering price targets. Wachovia (NYSE:WB) was off 5% and Bank of America (NYSE:BAC) was down 4%.

During Thursday’s session, crude oil futures offered an olive branch to stock market bulls via the largest one-day slide in about three months, but the market for black gold rallied back some overnight, climbing above $136 dollars a barrel heading toward the U.S. stock market opening. There was some talk once again about Israel planning a strike against Iran’s nuclear facilities; those rumors were in the news back on June 6 when crude oil jumped.

The stiff bounce in crude oil was accompanied by a sinking U.S. dollar, which lost 0.7% against the euro and about 0.5% versus the yen. The sinking dollar also could support a wide range of other commodity markets heading into the weekend.

Stock markets around the world were on the defensive overnight, with Japan down 1.3%, Taiwan off 1.8%, Australia down 1.4%, India down 3.4%, Hong Kong down 0.2%, South Korea down 0.6%. China shares did bounce 2.7%, but that . . .

Small-cap stocks are expected to open sharply lower, pulled down by renewed concerns within the financial sector, a reversal in crude oil prices and slumping equity markets around the world overnight. The Russell 2000 (NYSE:IWM) was off about 0.6% in after-hours trading, which would translate to an opening near 733.00.

There were wire service rumors this morning that Merrill Lynch (NYSE:MER) could issue a profit warning. Merrill Lynch shares were off 3.8% in overnight action and other investment banking houses such as Goldman Sachs and JP Morgan were both off some 1% in after-hours action. Also on the financial front, Merrill Lynch analysts are forecasting dividend cuts at several banks and lowering its price target for Wachovia (NYSE:WB), saying that bank stocks were in “capitulation” mode. Wachovia shares were down some 4% in after-hours trading. Bank of America (NYSE:BAC) shares were down more than 2% overnight.

Crude oil prices reversed course this morning after notching the largest one-day decline in a quarter Thursday. Crude oil was up more than $2 a barrel heading toward the stock market opening, rising back above $134. The rise in crude oil was accompanied by a slide in the U.S. dollar, which tumbled more than 100 basis points, or 0.7% versus the euro and was also down about 0.5% against the . . .

Small-cap stocks extended the recent slide Wednesday, as rising crude oil prices, ongoing credit crunch worries and a soft “Beige Book” report on economic activity took a toll. The Russell 2000 (NYSE:IWM) shed 14.74, or 2.01%, to 717.88, the lowest daily close since May 7 and the fourth consecutive close below opening levels, which shows that the bears are winning all the intraday skirmishes lately.

The Russell also closed below the 20-day moving average for the third consecutive session on lower closes, something that has not happened since March. The 20-day moving average is often watched as a short-term trend proxy and the last two times we saw the market below that line three consecutive periods, it presaged a nasty move lower. In addition, late in the day the Russell popped through key chart support at 720.50. Decisive action below that support would suggest a technical breakdown of the recent recovery move, and carries a downside target to 690, which makes action Thursday even more important to gauge the power of this pullback.

Crude oil prices shot $7 dollars a barrel higher Wednesday as the weekly stocks report reflected a drop in U.S. inventories for the fourth consecutive week. Crude oil prices jumped to more than $138 dollars, closing in on last week’s record high that approached $140. Elsewhere in the commodities arena, corn, soybeans and wheat soared up their daily trading limits today amid flooding in the heartland. Corn prices have been making record highs, which means that consumers’ wallets are taking a hit at the gas pump and then again at the grocery store. The iPath GSCI Total Return structured note fund reversed two days of losses to notch new record highs today, reflecting the broad advance in the price of physical goods. The Commodity Research Bureau Index of 19 markets also made new record highs today. A slide in the U.S. dollar also contributed to the rise in crude oil and other commodities, with the greenback down 0.4% against the yen, and off about 0.6% versus the . . .

Small-cap stocks plunged on the opening, pulled down by hawkish inflation comments overnight from Federal Reserve Chairman Ben Bernanke, who said that the central bank will resist rising long-term inflation. His comments stoked stagflation fears and sent a shiver through already embattled financial shares, which fear higher interest rates. At 9:56 a.m. ET, the Russell 2000 (NYSE:IWM) was off 4.77, or 0.65%, at 730.48.

Bernanke also said that the risk of a substantial downturn in the economy has eased, which hints that the Fed has shifted into a “fight inflation” mode. If so, then the next move from the Fed could be a rate hike, which would raise the price of money, boost rates and seemingly support the U.S. dollar. Indeed, the greenback jumped overnight on the Bernanke remarks, climbing to three-month highs against the yen, and rising about 0.9% versus the euro. The dollar managed to remain higher despite a sloppy monthly trade report, which showed the U.S. deficit climb to $ 60.9 billion, above the forecast for a deficit of $59.9 billion.

Despite the jump in the U.S. dollar this morning, crude oil prices were higher, rising back above $137 overnight as supply jitters countered softer demand from lofty prices. The OPEC Secretary General said the energy market was “panicking” and that there was no shortage of oil now or in the future. That said, Russia’s Gazprom, which supplies a quarter of Europe’s natural gas, predicted crude oil prices could double within 18 months, reaching $250 dollars a barrel in 2009. Right into the U.S. stock market opening, crude oil prices did pull off the highs, and gold was down $2 dollars. As the day progresses, it will be interesting to see if commodity markets are shaken by the Fed’s heightened inflation focus and the upside pop in the dollar. From a long-term perspective, the dollar is still historically low, which bolsters demand for many commodity goods that are priced in dollar units.

Right now, investors are concerned that the United States could limp into a stagflation stage in which high prices combine with a stagnant economy to cripple corporate input costs and rob consumer purchasing power. These fears are also surfacing at a time when small caps are coming off six-month highs, perhaps providing a higher . . .

Small-cap stocks pushed lower again on Monday, pressured by sinking financial shares as yet another big name financial firm unveiled a capital raising effort. The Russell 2000 (NYSE:IWM) closed down 5.11, or 0.69%, at 735.26. Small caps were quite a bit weaker than large-cap stocks, narrowing the wide spreads that developed during last week’s volatile action.

For the last couple of weeks, Lehman Bros. (NYSE:LEH) has been the poster child for credit crunch concerns, and after days of speculation the firm finally announced plans to raise $6 billion in capital to shore up balance sheets. The Lehman news today sparked another bout of selling in the stock, which lost about 11% on the day. In addition, other large financial firms were pulled into the undertow, with JP Morgan (NYSE:JPM) down 7% and Merrill Lynch (NYSE:MER) off 4%. The credit concerns are not solely a large-cap issue. In fact, during most of the credit crisis, small caps have tended to suffer relative to large-caps on a perception that the large banks and other financial firms have easier access to credit lines.

Early today, small caps gathered some relief bids from a pullback in crude oil prices, which slipped some $4 dollars a barrel back below $135. Still, national pump prices popped above $4 dollars a gallon over the weekend, and it will take additional downside action in crude to spark further hope about consumer spending into the summer driving season. There also was a brief morning bid in stocks when the April pending home sales report came in up 6.3%, well above the forecast for a dip of 0.3%, but the data is for April numbers and had very little staying power with stocks.
 
Broad market sectors under selling pressure today were dominated by the financial theme. The biggest losers included thrifts and mortgage financial firms, diverse financial services shares, investment banking, regional banks and diversified banks. On the upside, aluminum, airlines, coal, oil and gas drillers were the top-performing stocks.

Small caps of note today included Rimage Corp. (Nasdaq:RIMG), which tumbled 21% as the firm lowered guidance for the second quarter. Maiden Holdings Ltd. (Nasdaq:MHLD) slipped 10% on heavy turnover following earnings news from Friday. Spreadtrum Communications (Nasdaq:SPRD) was off nearly 17% on an . . .

Small-cap stocks pushed lower Monday as credit crunch fears resurfaced, igniting a flurry of selling in the financial sector that spread into several other arenas as well. The Russell 2000 (NYSE:IWM) tumbled 7.25, or 0.97%, to 741.03. For much of the day, small caps appeared set to generate the largest one-day percentage decline in nearly a month, but some late buying in the final half-hour lifted the market well off the intraday lows.

Renewed concerns about the credit crisis originated overseas in the United Kingdom when Bradford & Bingley (LON:BB), a large mortgage provider for residential rental units said that housing market woes are deepening. Shares in Bradford & Bingley tumbled 24% and sparked selling enthusiasm in various European banks.

Selling in financial shares picked up additional momentum when Standard & Poor’s lowered credit ratings on some key U.S. securities firms. Lehman Bros. (NYSE:LEH) shed over 7% on the ratings news, while Morgan Stanley (NYSE:MS) and Merrill Lynch (NYSE:MER) both lost over 3%.

In addition to the concerns over mortgage houses, brokerage firms and other financial shares, a couple of major American banks changed up top management leaders, which also shook up the market. Wachovia Corp. (NYSE:WB) ousted its CEO and the stock slid about 2%. Meanwhile, Washington Mutual (NYSE:WM), said it would strip away the title of chairman from its chief executive next month. Washington Mutual shares dipped to their lowest level since mid-March on the news, but bounced back to close near steady levels.

Even though the credit crunch concerns dominated investor psychology today, a reversal in crude oil from overnight losses probably didn’t help matters for the bulls. Crude oil climbed back to nearly $128 dollars a barrel, while gold pushed higher. In addition, wheat futures jumped 2.7% and corn rallied about 2.6%. The Commodity Research Bureau Index climbed 0.85% and is just slightly below the record . . .

Small-cap stocks pushed higher Thursday, with the Russell 2000 (NYSE:IWM) climbing 8.96, or 1.27%, to 717.07. Small caps assumed leadership among equity index products on the rise, fueled by a bounce in the U.S. dollar and a drop in crude oil prices. Financial stocks and insurers provided a significant lift to equities big and small, with Merrill Lynch (NYSE:MER) jumping nearly 8% as the company raised its dividend, and insurance giant Travelers (NYSE:TRV) climbing 5% as the company upgraded its 2008 outlook.

Commodities took a tumble today, which may have eased some of the food and energy fears that have weighed on investor psyche and made headlines in national and international media. Just two days after a USA Today poll said that rising food costs were a major concern for a majority of consumers, news hit around the country of rice being rationed at grocery stores because of shortages. However, the Commodity Research Bureau Index tumbled 1.6% today, which may have provided a lift to stocks, especially since crude oil came off about $3 per barrel from its lofty perch.

Investors also appeared to breathe a sigh of relief about the economic outlook when weekly claims came out at 342,000, much better than the forecast of 375,000. Even though durable goods orders were relatively soft and the New Home Sales report was awful, market focus seemed to settle in on the claims data as a bright enough spot to counter the other economic news. As it stands, the durables data tends to fluctuate quite a bit month-to-month, and everyone already knows that the housing market is floundering. The only data of note Friday morning comes from the Michigan . . .

The Russell 2000 (NYSE:IWM) is deep into negative territory as investors parse through the latest earnings and economic news. At 1:21 p.m. ET, the small-cap index had let go 7.18 points, or 1.01%, to 706.21. The Dow Jones Industrial Average was down 17.26 points, or 0.14%, to 12,602.01.

Small-cap stocks fell out of the gate and have been moving lower as major corporations announced disappointing quarterly earnings.

Merrill Lynch & Co., Inc. (NYSE:MER) is partially to blame for the bearish mood on news before the opening that it swung to a steep first-quarter net loss and will have to cut jobs due to more writedowns associated with the subprime mortgage mess.

Shares of Pfizer Inc. (NYSE:PFE) are also falling on news before the start of trading that first-quarter profit declined 18%.

Meanwhile, shares of small-cap Spectrum Pharmaceuticals, Inc. (Nasdaq:SPPI) are posting a healthy gain on news that one of its drugs has . . .

The Russell 2000 (NYSE:IWM) stumbled on the opening, unable to extend the big rally from Wednesday’s action. At 10:05 a.m. ET, the Russell was down 7.60, or 1.06%, at 705.79 as a profit-taking mentality from those who caught the rise Wednesday dominated early action.

As the market progresses today, it will be important for the Russell to find support above the old swingline at 700. If the selling pressure begins to intensify, 695 is the next support zone to watch. Any move back into the green would be an important show of resilience as the market has been unable to sustain upside momentum after 3% rally days so far this year.

The market remained under pressure after the Philly Fed survey, which came out at 10:00 a.m. ET, was down 24.9%, quite a bit worse than the market forecast of a 15% loss. The sobering Philly Fed numbers overshadowed the Leading Indicators report, which rose 0.1%, in line with expectations.

Ahead of this morning’s opening, the Weekly Claims report was relatively close to the forecast, and quickly fell off traders’ radar screens, especially ahead of the Philly Fed and Leading Indicator reports.

With crude oil tipping the scales at fresh record highs this morning near $115 dollars a barrel and gasoline pump prices climbing before we’ve even reached . . .

Small-cap futures are expected to open lower this morning, with overnight futures trading down about 0.50%. Overseas markets were higher in Asia Wednesday night in line with Wednesday’s gains in U.S. equities, but the move was not as impressive (Europe equities were mixed), which might have sparked profit-taking from short-term traders.

Futures markets wafted through the Weekly Claims report this morning with little change, as the number was close enough to the market consensus to have very little impact on the morning action.

There is further event risk this morning from the Philly Fed survey and Leading Indicators, which both hit the wires at 10:00 a.m. ET. The Philly Fed report is expected to sport five consecutive contraction readings for the first time since the 2001 recession. The Leading Indicators report is a compilation of mostly-known . . .

The Russell 2000 (NYSE:IWM) fell hard as investors worried about corporate earnings and reacted to news of record high oil prices. The small-cap index dropped 13.54 points, or 1.90%, to 698.38. The Dow Jones Industrial Average let go 49.18 points, or 0.39%, to 12,527.26.

On a year-to-date basis, the Russell 2000 has declined 8.83%, while the Dow has retreated 5.56% and the S&P 500 is down 7.75%.

Small-cap stocks suffered more than their bigger brothers today as fears that the sagging economy will weaken corporate earnings led to a sell-off. United Parcel Service, Inc. (NYSE:UPS) reported after the close on Tuesday it lowered its first-quarter profit forecast. The Atlanta, Ga.-based company is considered a bellwether because its performance is closely related to the sales of other businesses.

More bearish news came after the start of trading following news reports that investment bank Merrill Lynch & Co., Inc. (NYSE:MER) will likely post a first-quarter loss due to its exposure to subprime loans and commercial real-estate debt.

In economic news, the price of oil briefly touched a record high of $112.21 a barrel on news after the opening that inventories unexpectedly fell . . .

The Russell 2000 (NYSE:IWM) is trading in the red as investors focus on corporate earnings. At 2:32 p.m. ET, the small-cap index was missing 12.32 points, or 1.73%, to 699.60. The Dow Jones Industrial Average was down 90.13 points, or 0.72%, to 12,486.31.

Stocks small and large are in negative territory as investors worry that earnings will be hurt by the current economic slowdown. United Parcel Service, Inc. (NYSE:UPS) reported after the close on Tuesday it has lowered its first-quarter profit forecast. The Atlanta, Ga.-based company is considered a bellwether because the strength of its business is closely related to the overall health of consumers and businesses.

More bearish news came after the start of trading following news reports that investment bank Merrill Lynch & Co., Inc. (NYSE:MER) will likely post a first-quarter loss due to its exposure to subprime loans and commercial real-estate debt.

Separately, the Mortgage Bankers Association reported before the opening that its measure of mortgage loan application volume fell 5.4% for the week . . .

"Bad, ugly times are priced into the market," says Jim Oberweis, Jr., editor of The Oberweis Report. The advisor is focused on growth stocks and is known for his Octagon Strategy, which assesses growth stocks based on eight primary metrics, including growth expectations, financial stability and valuation.

Perhaps the most critical of these concerns is that a stock's price-to-earnings multiple not exceed its growth rate. In other words, if the P/E is 30, the stock must be showing 30% annual growth. This steadfast focus on growth at a reasonable  price has led to a top long-term performance record for Oberweis.

"Fear of the future is what drives stocks lower and when the market is near the bottom, it doesn't usually feel like better times lie ahead,” he says. “But when everyone is betting on bad times, even mediocre improvements can lead to powerful rallies."

One sign that adds to Oberweis' current bullishness is the move by Wall Street firms to lay off employees. "Fears have been brought to life by layoffs at Goldman Sachs (NYSE: GS), Merrill Lynch (NYSE: MER), Morgan Stanley (NYSE: MS), Lehman Brothers (NYSE: LEH) and Bear Stearns (NYSE: BSC),” he says.

To be precise, he says, the last time the "Wall Street Man and the Common Man met in line at the unemployment office" was in mid-2002, after the dot-com bust had crushed the investment banks and shaken technology firms alike.”

He says that at that time, the investment industry shrank, confidence sagged and layoffs ensued, but as it turns out, it was a good time to be buying stocks.

The Russell 2000 (NYSE: IWM) has extended its decline and remains the worst performing major U.S. index. At 2:03 p.m. ET, the small-cap index had dropped 10.73 points, or 1.54%, to 685.55. The Dow Jones Industrial Average (INDU) had retreated 105.02 points, or 0.85%, to 12,179.28.

The bears are in control as investors respond to news of current and possible future downgrades in the financial sector.

There’s speculation that rating agencies Moody’s, Standard & Poor’s and Fitch will move to downgrade major bond insurers MBIA Inc. (NYSE: MBI) and Ambac Financial Group, Inc. (NYSE: ABK).

That will create problems for banks that hold bonds insured by MBIA and Ambac, possibly leading to billions in writedowns.

Elsewhere, brokerage house Merrill Lynch & Co., Inc. (NYSE: MER) downgraded government-sponsored mortgage lender Freddie Mac (NYSE: FRE) to “sell” from “hold.”

Small-cap stocks have fallen more than their bigger brothers, with Cbeyond, Inc. (Nasdaq: CBEY), a provider of Internet protocol-based (IP) communications services, being one of the biggest losers.

Bill Martin is well known as the original founder of the Raging Bull, an early leader among financial online communities. Now, in addition to being a director for BankRate.com, he is also the founder of Indie Research, which publishes such sites as BullMarket.com.

His Bull Market Report is a daily investment service focused on identifying what he considers to be "great long-term growth, value, and income generating investments."

As part of a diversified, long-term portfolio Martin will often recommend small-cap stocks, such as one of his latest recommendations, Salary.com, Inc. (Nasdaq: SLRY), with a market cap of $140 million.

"Salary.com will be celebrating the one-year anniversary of its IPO and subsequent listing on the Nasdaq stock exchange,” he says. “It was around this same time that we originally looked at the company, telling investors to steer clear."

Since his first cautious assessment, the shares have ranged between $16.32 per share on the high side to Thursday’s closing price of $8.55.

Now, a year later, he has reexamined the shares. "With the stock price now significantly lower — over 40% lower — and top-line growth still strong, our opinion has changed," he says.

At its core, he notes, Salary.com provides Web-based software suites that help companies manage their employee compensation packages. "As its name suggests, the company helps clients determine employee salary and compensation through a variety of comparable databases, third-party data, and in-house data available from customers," Martin says.

The Russell 2000 (NYSE: IWM) and the other major U.S. indices are in the red as investors sell financials and focus on the economy.

At 11:17 a.m. ET, the small-cap index was down 3.84 points, or 0.53%, to 726.66. The Dow Jones Industrial Average (INDU) had shed 41.46 points, or 0.33%, to 12,701.73.

New orders for manufactured goods increased 2.3% in December, the U.S. Census Bureau reported after the start of trading. That’s a rise of $10.1 billion to $441.6 billion.

The numbers represent the biggest jump since July but are nevertheless below the 2.5% forecasted by economists. Factory orders increased an upwardly revised 1.7% in November.

Orders for durable goods, which are intended to last at least three years, jumped 5% after a lackluster rise of 0.5% in November.

The data tells us that the manufacturing sector is holding up.

Contributing to the bearish sentiment is news before the start of trading that analysts suggest selling shares of banks and other financial companies.

Brokerage house Merrill Lynch & Co., Inc. (NYSE: MER) said that shares of Wells Fargo & Co. (NYSE: WFC) and Wachovia Corp. (NYSE: WB) are overpriced, while UBS AG (NYSE: UBS) downgraded American Express Co. (NYSE: AXP) to “sell” from “buy.”

Meanwhile, the White House released its proposed $3.1 trillion federal budget for fiscal 2009, which begins in October.

The Bush Administration expects the budget deficit to reach $410 billion in the current fiscal year and $407 billion in fiscal 2009. The deficit in fiscal 2007 was $162 billion.

The draft budget would make the 2001 and 2003 tax cuts permanent and close numerous government programs. However, it’s likely that the Democratic U.S. Congress will disregard many of the president’s proposals.

The Russell 2000 (NYSE: IWM) and the other major U.S. indices fell hard today on news of bad economic reports and Bernanke’s congressional testimony. The small-cap index let go 19.34 points, or 2.76%, to 680.57, its lowest level in more than one year. The Dow Jones Industrial Average (INDU) fell 306.95 points, or 2.46%, to 12,159.21.

On a year-to-date basis, the Russell 2000 is down 11.16%, while the Dow has deteriorated 8.33% and the S&P 500 has lost 9.20%.

Stocks small and large plunged today on more fears about the sad state of the U.S. economy.

“Incoming information has suggested that the baseline outlook for real activity in 2008 has worsened and that the downside risks to growth have become more pronounced,” U.S. Federal Reserve chairman Ben Bernanke told Congress today. “In light of recent changes in the outlook for and the risks to growth, additional policy easing may well be necessary.”

“We believe the Fed will be aggressive in cutting the Federal Funds rate in a series of 50 basis point cuts, starting with one on January 30th,” said Arun Raha, vice president of Economic Research and Consulting for the North American operations of reinsurance company Swiss Re, in an email.

But investors focused on the grim economic picture and allowed the bears to completely dominate trading. Equities actually began the session with modest gains but were quick to lose their grip.

Bernanke’s testimony coincided with the release of the Federal Reserve Bank of Philadelphia’s general economic index, which showed that the region’s manufacturing activity contracted more than forecast in January.

The Russell 2000 (NYSE: IWM) and the other major U.S. indices fell today on more financial problems and fears of a consumer slowdown. The small-cap index dropped 15.56 points, or 2.16%, to 704.65. The Dow Jones Industrial Average (INDU) retreated 246.79 points, or 1.92%, to 12,606.30.

On a year-to-date basis, the Russell 2000 has lost 8.01%, while the Dow is off 4.96% and the S&P 500 has shed 4.59%.

The bears were in the driver’s seat today as news of more pain at major financial firms sparked worries that the subprime mortgage mess could take its toll on the American consumer.

Small-cap stocks opened with a drop and never looked up on news that Merrill Lynch & Co., Inc. (NYSE: MER), the world’s largest brokerage house, may incur $15 billion in losses from investments in securities backed by mortgage loans.

Mortgage lenders nationwide frequently packaged loans and sold them as securities to financial companies, and as a result both parties have suffered billions in losses as U.S. home prices started to stagnate in the second half of 2006 and many borrowers defaulted on their loans and went into foreclosure.

Adding to the gloom was New York-based credit card issuer American Express Co. (NYSE: AXP), which announced that it will absorb a fourth-quarter pretax charge of about $440 million due to slower spending by card members and an increase in delinquencies.

The Russell 2000 (NYSE: IWM) is falling on news of worse-than-expected earnings forecasts from major financial players. At 1:26 p.m. ET, the small-cap index had retreated 8.53 points, or 1.18%, to 711.68. The Dow Jones Industrial Average (INDU) was down 207.20 points, or 1.61%, to 12,645.89.

The bears are dominating trading as stocks small and large are losing ground on news that the strain from the problems in the subprime mortgage sector has spread.

Merrill Lynch & Co., Inc. (NYSE: MER), the world’s largest brokerage house, reported before the start of trading that it may incur $15 billion in losses from investments in securities backed by mortgage loans.

That’s more than twice what the New York-based company had initially projected and an indicator that the problems stemming from the stagnation in the U.S. housing market continue to ripple through financial markets.

More bearish news came from luxury jewelry seller Tiffany & Co. (NYSE: TIF), which lowered its guidance for the fiscal year, and credit card issuer American Express Co. (NYSE: AXP), which announced a fourth-quarter pretax charge of about $440 million due to slower spending by card members and an increase in delinquencies.

The American consumer is still spending money, but retail sales have slackened due to high energy costs.

The Russell 2000 (NYSE: IWM) and the other major U.S. indices are falling on more news of financial trouble stemming from the subprime meltdown.
 
At 10:33 a.m. ET, the small-cap index had lost 9.64 points, or 1.34%, to 710.57. The Dow Jones Industrial Average (INDU) was off 184.12 points, or 1.43%, to 12,668.97.

Stocks opened in negative territory following news that Merrill Lynch & Co., Inc. (NYSE: MER) may suffer $15 billion in losses from investments in securities backed by mortgage loans.

The loss, which is twice what the New York-based investment bank had initially estimated, is an unpleasant reminder of how shockwaves from the stagnating U.S. housing market continue to ripple through financial markets.

There was more bearish news from the financial sector as credit card issuer American Express Co. (NYSE: AXP), announced that it will absorb a fourth-quarter pretax charge of about $440 million due to slower spending by card members and an increase in delinquencies. The company said that it now expects fourth-quarter earnings below the level a year earlier.

Many mortgage lenders nationwide have taken a hit and even declared bankruptcy as U.S. home prices have stagnated and many borrowers have defaulted on their loans and gone into foreclosure. Lenders frequently packaged loans and sold them as securities to financial companies, which have in turn also incurred billions in losses.

The Russell 2000 (NYSE: IWM) futures are down and the small-cap index will open with a decline on news of more mortgage losses.

Small-cap stocks are set for a bearish opening following news that Merrill Lynch & Co., Inc. (NYSE: MER) may suffer $15 billion in losses from investments in securities backed by mortgage loans. The loss is almost twice what the New York-based investment bank had initially estimated and an unpleasant reminder of how shockwaves from the stagnating U.S. housing market continue to ripple through financial markets.

Providing more unpleasant news is credit card issuer American Express Co. (NYSE: AXP), which announced that it will absorb a fourth-quarter pretax charge of about $440 million due to slower spending by card members and an increase in delinquencies. The company said that it now expects fourth-quarter earnings below the level a year earlier.

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:

• AmCOMP Inc. (AMCP), up 41% on news it will be acquired by Employers Holdings, Inc. (NYSE: EIG).
• Columbia Bancorp (CBBO), up 20%.
• USANA Health Sciences, Inc. (USNA), up 16% on news an informal inquiry by the U.S. Securities and Exchange Commission has ended with no action.

Biggest percentage losers:

• Cadence Pharmaceuticals, Inc. (CADX), down 47% on news a clinical trial did not meet its primary endpoint.
• Opnext, Inc. (OPXT), down 14% on news that it expects fiscal third-quarter sales below Wall Street’s projections.
• Wavecom S.A. (WVCM), down 5%.

The Russell 2000 (NYSE: IWM) rallied and posted gains for the fourth consecutive day on news that the American consumer remains strong. The small-cap index added 18.06 points, or 2.35%, to 785.60. The Dow Jones Industrial Average (INDU) climbed 205.01 points, or 1.55%, to 13,450.65.

On a year-to-date basis, the Russell 2000 is off 0.23%, while the Dow is up 7.83% and the S&P 500 has risen 4.79%.

The bulls completely dominated trading today on news that personal spending rose a better-than-expected 1.1% in November, according to the U.S. Commerce Department. The increase, the biggest in over three years, came as consumers responded favorably to holiday discounts offered by retailers.

Economists were expecting spending to increase 0.7% after a rise of 0.2% in October.

The news calmed fears that consumers will cut back on spending due to falling home prices and higher energy costs. Consumption is about 70% of gross domestic product.

However, Americans are still apprehensive about the economy and their personal finances.

A Reuters/University of Michigan consumer survey showed that consumer sentiment fell to 75.5 in December from 76.1 in November. That’s the lowest level since September 2005, when the country was dealing with the aftermath of Hurricane Katrina.

Economists had actually forecasted a slightly steeper decline to 74.5. Consumer sentiment measures whether or not consumers feel like spending money.

The Commerce Department also reported that personal income in November rose a lower-than-expected 0.4% following an increase of 0.2% in October.

In corporate news, Merrill Lynch (NYSE: MER) also contributed to the bullish sentiment. A report in The Wall Street Journal claims that the New York-based company will sell a stake of itself for a $5 billion cash injection from Singapore’s state investment company.

The Russell 2000 (NYSE: IWM) is posting solid gains as investors react to upbeat news about personal spending and a major corporation. At 2:58 p.m. ET, the small-cap index had climbed 15.72 points, or 2.05%, to 783.26. The Dow Jones Industrial Average (INDU) was up 213.14 points, or 1.61%, to 13,458.78.

The bulls are looking strong this afternoon as stocks are buoyed by news of stronger-than-expected personal spending and calming developments at a major financial player.

Personal spending climbed 1.1% in November, the U.S. Commerce Department reported before the start of trading. The increase, the biggest in over three years, calmed fears that Americans will spend less this holiday season due to falling home prices and higher energy costs.

Economists were expecting spending to increase 0.7% after a rise of 0.2% in October.

The same government report showed that personal income in November rose 0.4%, above October’s 0.2% increase. However, economists were forecasting a 0.5% climb.

The numbers tell us that consumers responded favorably to holiday discounts offered by retailers.

In corporate news, there’s speculation that Merrill Lynch (NYSE: MER) could sell a stake of itself for a $5 billion cash injection from Singapore’s state investment company.

That’s not a surprising move, since many other financial services giants have also sold stakes in order to secure much needed capital to deal with the consequences of the meltdown in the subprime mortgage sector.

Elsewhere, the price of oil has increased $2.29 to $93.35.

The Russell 2000 (NYSE: IWM) fell today on news that high energy costs led to a jump in U.S. producer prices. The small-cap index dropped 2.25 points, or 0.29%, to 769.46. The Dow Jones Industrial Average (INDU) gained 44.06 points, or 0.33%, to 13,517.96.

On a year-to-date basis, the Russell 2000 is down 2%, while the Dow has moved up 8.36% and the S&P 500 has added 5.07%.

Producer prices, the prices received by domestic producers for their output, jumped 3.2% in November, according to the U.S. Labor Department. The increase, the biggest in 34 years, was led by a 14.1% surge in the price of energy goods.

Economists were expecting to see an increase of 1.5% following October’s rise of 0.1%.

The core producer price index, which excludes food and energy, added 0.4%, also more than projected.

The statistics raised fears of an uptick in inflation, which would make it less likely that the U.S. Federal Reserve will move to lower its target interest rate in the near future.

Small and large-cap stocks opened in negative territory and stayed there throughout the morning. A cautious rally took hold in the final two hours of trading, but the Russell 2000 was incapable of clearing the flat line the way the Dow did.