Tag - Myrg

After trading down for most of today's session stocks edged up toward the close to finish up.

The Dow finished at 9,108.51, up 15.27 points; the Nasdaq was up 1.93 point to close the day at 1,967.89; and the S&P 500 was up 2.92 points to end at 982.18.

The Russell 2000 was up 2.42 points to finish strong at 550.88.

Leading small-cap price gainers was Select Comfort Corp. (Nasdaq:SCSS) up 46% on news that while sales for the second quarter of 2009 were down compared to the same quarter in 2008, operation income was positive net losses were substantially less. The company reported that Q2 operating income was $1 million.

Other leading small-cap gainers include Cerus Corp. (Nasdaq:CERS) up 45%; Jazz Pharmaceuticals (Nasdaq:JAZZ) up 44%; Ariad Pharmaceuticals (Nasdaq:ARIA) up 42%; and Harleysville National Corp. (Nasdaq:HNBC) up 38% on news that it would be acquired by First Niagara (Nasdaq:FNFG) for $237 in an all stock deal. The deal values HNBC at roughly $5.50 per share, representing a 37.5% premium over Friday's closing price for HNBC.

*****Earnings season has been overwhelmingly positive so far. Only 16% of the S&P 500 companies that have reported so far has missed expectations. 75% have beaten expectations. That's what happens when earnings estimates are so low that they are virtually impossible not to beat. 

But what's happening now is very interesting…

Analysts are raising their earnings estimates considerably. Bloomberg reports that forward revisions to estimates now put the forward P/E of the S&P 500 at 13.13. That's 26% below the 50-year average 16.54.

So are we due for a 26% rally as stocks return to their historical norms?

*****If earnings season finishes with 75% of the S&P 500 exceeding expectations, that would be a record. Since 1933, no more than 72% of the S&P 500 has beaten earnings expectations.

But Bloomberg also reports that just half of the S&P 500 companies that have reported have beaten revenue expectations. That means much of the earnings surprises we've seen are a product of cost-cutting and not rising revenues.

To the bears, this suggests there is still risk for stock prices.

*****To the bulls, it's now clear that pessimism went way too far. Stocks were priced way too low for a disaster that never materialized. More and more strategist-types are coming out and saying things like the economy is stronger than the numbers show and that a V-shaped recovery is underway.

Some economists are even raising their 3rd quarter GDP estimates.

Federal Reserve Chief Ben Bernanke states that the economy will be in stronger footing. And this is an interesting point. Overinvestment in real estate is being written off and prices are falling to levels that make sense for the family budget and the business bottom line. Increased regulation will keep investors' money safer (we hope). Increased savings will put consumers on stronger footing.

In essence, the U.S. economy will, at some point, start growing from a much lower baseline. And while the stock market may only recover the gains it lost over the last two years, that recovery process would lead to some phenomenal gains from current levels.

*****The question for me is: when? I can't help but think that analysts may be overshooting on the upside, just as they overshot on the downside. And I'm pretty sure I'm not the only one who feels this way. Consider that existing home sales jumped 11% in June, and yet stocks are in the red so far today.

There can be no doubt that such a jump in home sales is unexpected good news. But stocks are ignoring it. I say that's because there's a lot of good news priced in already. 

*****So I may be cautious, but I'm going to do what I have been: buy quality stocks, watch them closely and take profits. That approach has been working great so far this year… 

*****TradeMaster Daily Stock Alerts readers just took another 19% gain on MYR Group (Nasdaq:MYRG). Nice work, Jason. If you missed Jason's video chart analysis from Friday, you can check it out HERE. 

*****Now let's have a look at the economic data for the week.

Tomorrow, Tuesday, June 28, we get the Case-Shiller Home Price Index and Consumer Confidence numbers. Wednesday, it's Durable Goods and Oil Inventories. Jobless Claims are out on Thursday.

Friday is the big one, with the release of Second Quarter GDP. This should be a major market mover.

Best Regards,

Ian Wyatt
Editor
SCI Daily

Bridge Bancorp Inc. (Nasdaq:BDGE), ESB Financial Corp. (Nasdaq:ESBF) and NeurogesX Inc. (Nasdaq:NGSX) are among the new 52-week highs in Wednesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: MYR Group Inc. (Nasdaq:MYRG), Central Garden & Pet Co (Nasdaq:CENTA), Cubic Corp (Nasdaq:CUB), Cott Corp (Nasdaq:COT), Bank of Kentucky Financial Corp (Nasdaq:BKYF) and China Holdings Acquisition Corp (Nasdaq:HOL).

Small-cap stocks threw a gasket in teh final hour of trading Friday, giving back a lion's share of Thursday's stunning rally off new bear market lows while finishing with the lowest weekly close since August 2003. Today's biggest small-cap gainers are . . .

The Russell was bleeding red during midday trading, down over 4% following the worst decline in October retail sales on record. Today's small-cap gainers are...

Small-cap stocks extended the morning rout into midday trading, pulled down by renewed worries about the economy following the worst decline in October retail sales on record, which only heightens fears about consumer spending moving into the key holiday season. At 2:16 p.m. ET, the Russell 2000 (NYSE:IWM) was down 4.29%, on target for the third-lowest daily close in more than five years and the lowest weekly close since August 2003 despite the dramatic recovery explosion from Thursday.

Energy and technology stocks were among the dominant drags on the market, with the Energy SPDR off nearly 5% and the tech-laden Nasdaq 100 down about 4.5%. Within the tech arena, anything tied to the cell phone business was getting hammered following Nokia’s warning that sales would fall far below expectations in coming months. Nokia Corporation (NYSE:NOK) was down 12%, Motorola Inc. (NYSE:MOT) was off 8% and QUALCOMM Inc. (Nasdaq:QCOM), the largest mobile phone chip maker, was down 6%.

Back on the commodities theme, crude oil prices were down about $1.60 a barrel, as worries about global demand persist. Despite the pullback on energy prices, commodities overall were hanging in there today, with the Commodity Research Bureau Index basically flat at mid-session. In general, commodities are way oversold and the U.S. dollar tone is mixed today (up versus euro, down versus yen).

As for retailers, today just isn’t pretty. The S&P Retail Index is down 6% and a host of name-brand companies released earnings today that were either disappointing, or even when solid for the third quarter reflected downward guidance for the coming quarter. Nordstrom Inc. (NYSE:JWN) was down 8%, JC Penney Company Inc. (NYSE:JCP) was down 9% and although the pain was intense for apparel oriented retailers, there was plenty of agony to go around; for instance, home improvement retailer . . .

Small-cap stocks opened lower, pressured by bleak retail sales data, soft earnings news, a pullback in energy prices, money flow into credit markets and a “breather” mentality after Thursday afternoon’s humongous recovery rally. Today’s small-cap gainers are ARYx Therapeutics Inc. (Nasdaq:ARYX), ATA (Nasdaq:ATAI) and Evotec (Nasdaq:EVTC).

Other Market Watch highlights today included:

• Energy shares were a big positive factor for the market during Thursday’s rally, but were a drag this morning.  
• Libor rates edged up again overnight for the second consecutive session, which raises some caution flags among investors about the lending mentality around the world.  
• Bernanke: Bank liquidity measures are generating tentative improvements in credit markets; central banks remain ready to act if needed.   
• There is also a chance that traders don’t want to be caught short over the weekend just in case the G-20 comes out with some stunning stimulus package.  

Small Cap Gainers:

• ARYx Therapeutics Inc. announces $21.6 million private placement; shares pop 41%. See (Nasdaq:ARYX).  
• Computer-based testing services provider ATA up 27% after revealing a $5 million share buyback program. See (Nasdaq:ATAI).  
• Evotec up 19% as Q3 loss narrows, it lifts FY08 revenue outlook. See (Nasdaq:EVTC).   • MYR Group, a specialty contractor serving the electrical infrastructure market in the U.S., is up 18% after reporting Q3 results. See (Nasdaq:MYRG).
• Human Genome Sciences up 4.2% in pre-market despite being downgraded to "neutral" on Tuesday. See (Nasdaq:HGSB).

Small Cap Losers:

• MedCath Corp. tumbled 33% as the health care services provider reported quarterly results. See (Nasdaq:MDTH).
• Ardea Biosciences Inc. fell 27% as the biotech firm also fell on earnings news. See (Nasdaq:RDEA).  
• Lasalle Hotel Properties fell 17% as the luxury hotel operator rescinded their previous outlook as results are falling well short of expectations. See (NYSE:LHO).  
• Abercrombie & Fitch Co. beats the estimate, but slashes its forecast as well. Shares down over 5%. See (NYSE:ANF).