Tag - Ncc

After initially spiking out of the gate on the government’s plan to unfreeze credit markets by directly injecting capital in banks and guaranteeing loans between banks, the Russell 2000 has steadily descended into the red midday, as traders locked in profits from Monday’s goliath rally. Small-cap gainers today included National City Corp. (NYSE:NCC), Aegon China Insurance (NYSE:AEG) and ChinaTransInfo Technology (Nasdaq:DGLY). Other Market Watch highlights today included:

• Treasury markets were falling hard as the safe-haven push dulled amid strong gains in equities.
• The weakest sectors in today's trading are iron & steel and real estate operations/services. Insurance is one of the day's strongest.
• California-based communications equipment maker JDS Uniphase is the day's most active small cap. Shares are down 12.4% to $6.36.
• The dollar is mixed against the euro and the yen midday and gold is off $2 per troy ounce to $839.
• BMO Capital’s Andy Busch told SmallCapInvestor.com that investors shouldn’t “get too excited by the upmove” today. “The Z factor,” or the unknown impact on companies’ sales or earnings, “will cap this rally as will the terrible . . .

Shares of National City Corp. (NYSE:NCC) have gained some 14% in pre-market trading after news that the regional bank is said to be in talks with several banks, including PNC Financial Services Group (NYSE:PNC) and Bank of Nova Scotia (NYSE:BNS), for a possible sale, according to The Wall Street Journal.

Shares jumped 14%, or $0.31, to $2.54 in pre-market trading. For detailed price information and news stories on National City, click NCC.

Small-cap stocks endured another sizable decline Monday, pulled down by tension over the health of the financial arena at a time when the economy is already struggling with rising unemployment, slumping housing markets and soaring energy costs. The Russell 2000 (NYSE:IWM) shed 10.45, or 1.55%, to 664.50, the third lowest daily close since mid-March.

The closing slide in small caps was a stark difference from this morning as the market appeared poised to begin the week with a relief rally. Stock index futures jumped some 1.6% during overnight action as investors embraced a plan by government authorities to shore up the balance sheet — and market confidence — in government-sponsored mortgage giants Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE). However, that overnight rally failed to gain traction relatively quickly once the market opened today, and a wave of selling swept through banking stocks, especially within the regional banking sector and smaller banks, which took a toll on small-cap index products. Despite opening up amid 20%-plus gains this morning, FNM and FRE eventually closed down 4.2% and 5.8%, respectively.

Elsewhere on the banking front, National City Corp. (NYSE:NCC) plunged 17% after trading was halted briefly on concerns about unusual trading activity. NCC was downgraded by analysts, and the stock dropped anchor, as the unsettling tide of selling coursed through financials a day after IndyMac Bancorp Inc. (NYSE:IMB) failed, becoming the third-largest U.S. bank failure on record.

There was some sense that investors are beginning to fret about all the special bail-out programs needed to avert systemic risk on the financial landscape. After all, there are only so many rabbits that magicians at the Federal Reserve and Treasury Department can pull out of their hats. What’s more, there are some concerns that these recovery efforts could flood the debt market with so much paper that supply issues could hamper funding, or even that the world could balk at “being the buyer of last resort for U.S. government debt,” as noted in a research report . . .

The Russell 2000 (NYSE:IWM) edged lower Monday, slipping 3.06, or 0.42%, to 718.00. Despite the dip, the market was still sitting on the second highest daily close since mid-February, and the rather tame pullback was no surprise given overbought momentum readings on daily studies after last week’s big surge.

In addition to profit-taking from short-term traders who caught the rally last week, the psychology behind today’s decline was fueled by soft earnings from the nation’s second largest bank, Bank of America (NYSE:BAC), which fell about 2.5% and was one of the biggest losers in the major broad indices. In addition, National City Corp. (NYSE:NCC), was down 27% after poor quarterly results and the general malaise in the financial sector kept ongoing frets over the credit crunch in play.

“The Fed has eased monetary policy 300 bps in a short span of time and implemented three new programs to reduce stress in the financial markets. However, market stress remains persistent,” Asha Bangalore, an economist with Northern Trust, said in an email. Bangalore noted that, “At the long and risky end, the spread between junk bonds and the yield on the 10-year U.S. Treasury note has improved” but remains elevated and a far cry from the spread levels prior to August 2007. “These indicators of market stress would have to show a significant improvement before it can be declared that the coast is clear,” she said.

In addition to credit market jitters, the market will likely continue to focus on various key headline earnings results the next couple of days, as the economic calendar is tame this week. In fact, there are no economic reports on tap until Wednesday’s existing home sales release, and although the housing market is in . . .