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Small-cap stocks pushed higher Friday, gaining a boost from merger activity in the banking sector, a jump in restaurant shares and a lift from news of a rescue plan for automakers. All of those factors help offset sloppy action in commodities, and worries about retailer sales into a key shopping weekend. The Russell 2000 (NYSE:IWM) closed up 7.09, or 1.48%, at 486.26 and is now down 37% for the year. Meanwhile, the Dow is off 35% for 2088 and the S&P 500 is down 40%.

Small caps were noticeably strong relative to large caps, fueled by M&A activity in the banking area. “I think that the M&T Bank Corp. (NYSE:MTB) purchase of Provident Bankshares Corp. (Nasdaq:PBKS) has caused investors to see value in small-cap banks and the purchase came at a nice premium,” Nick Kalivas, vice president of financial research with MF Global, said in an email interview. PBKS shares jumped 60% on the news.

Kalivas also said that positive profit news from restaurant operator Darden Restaurants Inc. (NYSE:DRI) provided a lift to the restaurant sector, which was reflected through impressive positive breadth in small-cap eateries. Small-cap restaurants on the move today included Cheesecake Factory Inc. (Nasdaq:CAKE) which jumped 12%; Brinker International Inc. (NYSE:EAT) up 29% as the firm completed a sale of the Macaroni Grill; The Steak n Shake Co. (NYSE:SNS), up 12%; and Papa Johns International Inc. (Nasdaq:PZZA) up 8%.

In addition, Kalivas said that the general atmosphere of cheaper gasoline and a mini-wave of refinancing activity provides a supportive element to the small-cap universe.

As for today’s quadruple witching expirations of stock index futures, options and single stock futures, Kalivas said that “pinning” action (which refers to . . .

Small-cap stocks pushed higher Wednesday, bolstered by a rally in tech stocks and another soothing pullback in crude oil prices. The Russell 2000 (NYSE:IWM) gained 4.85, or 0.67%, to 725.90, the highest daily close since June 19.

Importantly, small caps finally broke free of the recent trading range. Sustained action above 726 is still needed to validate the upside breakout. Today’s rally also confirmed a breach of trendline resistance from both the June peak and the previous July high, which adds to the chart-related glow.

Crude oil prices slipped to 3-month lows today when the weekly inventory report showed a larger-than-expected build in crude oil stocks. The report reflected an increase in stocks of 1.7 million barrels, well beyond the forecast for a rise of 300,000. Still, gasoline stocks had a surprisingly large drawdown of inventory, which took some of the bearish sting out of the crude data. Overall, the weak tone in crude oil continues to provide a cushion for equity markets, providing some hope that consumers will spend less at the gas pump and more on other endeavors...

Small-cap stocks are expected to open flat to slightly lower as the market pauses to evaluate Tuesday’s big rally. The Russell 2000 (NYSE:IWM) was off about 0.1% in after-hours trading, which would suggest an open near 720.00.

Without any key economic data to jolt the market today, investors will likely focus on earnings news and gyrations in crude oil prices. Crude oil prices were up slightly overnight, rising some $0.30 to pull above $119 dollars a barrel awaiting weekly inventory numbers later this morning. The market is anticipating a build of about 300,000 barrels in crude stocks on the report, which will be released around 10:35 a.m. ET.

On the big-cap earnings front, Cisco Systems Inc. (Nasdaq:CSCO) topped the forecast and rallied in after-hours trading, providing a lift to the tech arena, which was reflected in a 7-handle positive spread in overnight trading between the Nasdaq and the S&P 500. CSCO shares were up over 6% overnight, tugging other tech bellwethers like Intel Corp. (Nasdaq:INTC) and Oracle Corp. (Nasdaq:ORCL) into positive territory as well. If recent history holds up, small-cap stocks tend to outperform the Dow and S&P 500 on days when tech stocks are doing well relative to the other large-cap products...

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 are poised for a dramatic slide on the opening in the wake of analyst downgrades for big-name stocks, slumping financial and tech shares, a batch of disappointing earnings figures and a rise in crude oil prices. The Russell 2000 (NYSE:IWM) was down about 1% in after-hours action, which suggests an opening near the 710 level.

Influential researchers at Goldman Sachs downgraded General Motors Corp. (NYSE:GM) overnight, and the stock tumbled 5% in after-hours trading. Goldman also put Citigroup (NYSE:C) on its sell list and the nation’s top bank slumped more than 4%. Goldman also slashed its rating on the brokerage industry, so those stocks could be under pressure this morning as well.

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 mixed.

On the tech front, big-name large caps like Research in Motion (Nasdaq:RIMM) and Oracle (Nasdaq:ORCL) were down 7% and 3%, respectively, in overnight trading, with RIMM’s profit outlook falling short of expectations and ORCL issuing a cautious . . .

Most of us have at one time experienced an attack of clutter when we discover that we desperately need a filing cabinet to keep all important documents organized. Now, imagine your documents piling up at such a rate that the one filing cabinet has become a warehouse full of filing cabinets, all containing records and receipts that aren’t immediately needed, but must remain accessible.

Although the situation rarely gets that bad for individuals, for the average business that stores most of its records electronically, it often seems like there are no limits, which is where Netezza Corporation (NYSE:NZ) comes in.

The seven-year-old Framingham, Mass.-based company is widely identified as one of the most promising of a group of data warehousing startups that offer technology to help companies make sense of the volumes of data they have in storage.

And sense, indeed, must be made. Many businesses are almost drowning in virtual data with the addition of new regulations mandating that many companies in the health-care and financial services industries keep more documents for longer lengths of time.

This same trend has also given rise to the data warehousing industry, which offers ways not only to store massive amounts of data, but to do so in an orderly fashion so that it can be called up as needed.

Netezza’s performance server allows companies to conduct detailed queries and sophisticated analyses of the data they have in storage, and its business is growing almost as swiftly as the amount of business-critical data in storage, estimated by International Data Corp. to be expanding at a rate of 50% per year.

Netezza’s shares have had a choppy ride since the company went public last July, swinging between $7.02 and $17.57, and closing at $12.43 on Friday. But all signs suggest that the long-term trend is up for this company, which has developed a superior data warehouse appliance that helps companies get a better view of what’s in all their virtual filing cabinets. Netezza is enjoying strong growth, and . . .

Recent consolidation in the tech sector has got analysts thinking a buyout may be in the future for i2 Technologies, Inc. (Nasdaq: ITWO). This week saw the first ripple of what could be a greater consolidation wave in the tech sector when software conglomerate Oracle Corporation (Nasdaq: ORCL) purchased BEA Systems. 

The speculation comes as the deadline for the provider of supply chain management’s recommendations for strategic review nears. Last November, i2 Technologies formed a strategic review committee to assist JP Morgan — which the company hired earlier in 2007 — to explore strategic options and devise a recommendation by Jan. 31, 2008.

“If companies such as Manugistics, Stellent, and Agile can find a home — so too should i2, with all of its maintenance revenue, IP, and net operating losses (NOLs),” Susquehanna Financial analyst James Friedman wrote in a research note. As a result of the buyout potential, the analyst is maintaining a positive rating.

Friedman’s analysis suggests an economic value of $590 million to $640 million as a buyout price for the firm, which would yield a per share take-out valuation of $19 to $21.

Friedman further suggests i2’s net operating loss carry-forwards could create substantial value for a strategic buyer. By applying Internal Revenue Code limits, the analyst speculates the company’s NOLs could be worth $70 million to $75 million, which could boost a potential bid for the company up to the range of $650 million to $700 million when combined with $115 million in cash.

Shares of i2 Technologies (ITWO) edged up 2.95%, or $0.36, to $12.55 at 12:54 p.m. ET. Shares of i2 Technologies have been trading in the range of $11.50 to $27.46 for the past 52 weeks.

In the late 1990s, the tech world scoffed at the notion that corporate America would ever accept the concept of paying to download software from the Internet. But today, a growing number of small and medium-sized businesses are using on-demand software, or software-as-a-service (SaaS), for convenience and as an effective way to trim IT costs.

Market researcher IDC predicts that SaaS, which currently accounts for less than 2% of the global software market, will grow 25% annually and become a $14.5 billion industry by 2011. The popularity of on-demand software is growing so fast, in fact, that it is beginning to transform the business software industry. The rise of the SaaS delivery model has software giants Microsoft Corporation (Nasdaq: MSFT), Oracle Corporation (Nasdaq: ORCL) and SAP AG (NYSE: SAP) a little nervous; all are plowing billions into efforts to respond to the emerging SaaS threat.

The emergence of the on-demand software trend reflects companies' growing desire for less cumbersome and more economical means of using information technology (particularly, Web-based systems) to their advantage. For example, a new generation of Tech-savvy workers and global talent shortfalls have changed the face of human resources, which has become a hot segment for on-demand software specialists at a time when even a tiny company may have a tangled mess of disjointed IT.

San Francisco, Calif.-based Taleo Corporation (Nasdaq: TLEO) is a developer of on-demand software that helps companies manage their human resources operations. HR is an area that is often challenging for smaller companies with less manpower dedicated to the department and inefficient ad hoc systems — often based on Excel spreadsheets and emails. Taleo software, which is easy to install, manage and integrate with existing software, helps growing businesses bring their human-resources functions up to snuff by simplifying recruitment, screening and tracking chores. The company sells its software directly to customers and through HR outsourcers with which it has established partnerships.

Since the Chinese government relaxed restrictions and allowed foreign financial institutions to enter China's retail banking market in December 2006, a world of opportunities have opened up for banks, both international and domestic.

China's increasingly liberalized financial services sector has attracted investment from global powerhouses such as Bank of America Corporation (NYSE: BOA), Citigroup Inc. (NYSE: C), HSBC Holdings (NYSE: HBC), Royal Bank of Scotland Group (NYSE: RBS) and Standard Chartered PLC (LON: STAN) — some have set up shop under their own banners, while others have purchased stakes in successful Chinese banks.

Stepped up competition from international banking rivals in a fast-growing market has left Chinese banks with no choice but to upgrade. Home-grown banks are now expanding their financial offerings and beefing up their IT infrastructure to keep up with highly-experienced foreign competitors vying for a piece of the more than $4 trillion in deposits held in China (and the growing demand for bank accounts, credit cards, mortgages and wealth management services among more affluent Chinese consumers).

One company that sees its future fortunes in the Chinese banking industry is Yucheng Technologies Limited (Nasdaq: YTEC), a leading information technology and outsourcing solutions provider. Yucheng provides services including IT consulting, system integration, financial software development, telephone and Internet banking, call center installation and support and risk management solutions to some of the largest banks, insurance companies and securities firms in China.

Secrets of the consumer are coming undone, exposed by DemandTec’s breakthrough marketing software. DemandTec, Inc. (Nasdaq: DMAN) leaves little to the imagination: its suite of scientifically infused software  tells retailers and makers of consumer products how to attract sales, price goods, run promotions, mold and predict demand, and drive profits.

Trading publicly since August but started in 1999, DemandTec has grown into a leader of commerce software, sporting a client list of the biggest retailers: Wal-Mart Stores, Inc. (NYSE: WMT), Safeway Inc. (NYSE: SWY), Target Corporation (NYSE: TGT), Best Buy Co., Inc. (NYSE: BBY) and Office Depot, Inc. (NYSE: ODP), among others. It also markets to consumer products companies, including Campbell Soup Company (NYSE: CPB), Cargill, PhilipMorris and Johnson & Johnson (NYSE: JNJ).

Even DemandTec would find it hard to better shape its own returns since its initial public offering at $11 per share. Its shares have rallied 50% in a little more than two months, closing Friday at $16.59. The high so far is $18.55 on Oct. 10, hit as the company rallied after second-quarter returns released Oct. 4 exceeded analyst expectations. Its market capitalization has grown to more than $420 million.

Revenues in the second quarter of fiscal 2008 ended Aug. 31 rose 40% from the previous year to $14.7 million. Sequential growth was 11% from the first quarter. The company gets its revenues from customer agreements that cover the use of DemandTec’s software and services that go with it. Revenue is recognized over the term of the agreement, which tends to run two to three years. On a non-GAAP basis, the quarterly loss was $0.02 per share, versus a penny gain in the same quarter a year earlier.

DemandTec also pleased investors by projecting revenues for full fiscal 2008 of $60.2 million to $60.7 million—up 40% year-over-year. The San Carlos, Calif.-based company said on its quarterly conference call that earnings for the year would be $0.07 to $0.08; in the third quarter, DemandTec expects to earn $0.03. 

“DemandTec’s consumer demand management solutions are clearly resonating within the retail and consumer goods verticals and we believe that the company is in the early stages of a multi-year growth opportunity,” analyst Jason Maynard at Credit-Suisse wrote in a research note following the conference call. Maynard repeated his “outperform” rating, saying that the company’s second-quarter results reaffirmed a very attractive small-cap growth story.

The Russell 2000 (NYSE: IWM) and the Dow ended the day and the week in positive territory following news of strong earnings from major players. The small-cap index added 3.35 points, or 0.41%, to 813.11. The Dow Jones Industrial Average (INDU) gained 53.49 points, or 0.39%, to 13,820.19.

For the entire week, the small-cap index added 29.62 points, or 3.79%. The Dow moved up 377.67 points, or 2.81%.

Futures today were pointing up before the opening and equities rose out of the gate.

Nike Inc. (NYSE: NKE) helped set the positive sentiment this morning when it reported a 51% increase in its fiscal first-quarter profit, beating Wall Street’s forecasts.

The Beaverton, Ore-based company had a net income of $569.7 million, or $1.12 per share, for the quarter ended Aug. 31, while 13 analysts polled by Thomson Financial were expecting earnings of $0.87 per share. A year earlier, the maker of athletic shoes booked a profit of $377.2 million, or $0.74 per share.

The Russell 2000 (NYSE: IWM) and the Dow (INDU) are in positive territory with less than two hours left in the session. At 2:26 p.m. ET, the small-cap index had moved up 2.92 points, or 0.36%, to 812.68. The Dow Jones Industrial Average had added 68.85 points, or 0.50%, to 13,835.55.

The bulls are helping stocks to solid gains today following news of good earnings from major players.

The morning began with news that Nike Inc. (NYSE: NKE), the world’s largest maker of athletic shoes, reported a 51% increase in its fiscal first-quarter profit, besting Wall Street’s projections.

Elsewhere, software maker Oracle Corp. (Nasdaq: ORCL) also announced better-than-expected fiscal first-quarter results, while mobile-phone chip maker Texas Instruments Inc. (NYSE: TXN) increased its dividend and raised its budget for stock buybacks by $5 billion.

Meanwhile, bank holding company HSBC announced this afternoon that it will close its U.S. subprime mortgage business and incur costs of $945 million. The shutting down of Decision One Mortgage will leave 750 employees without a job in the latest sign of the depth of the subprime mortgage market’s troubles. HSBC was one of the largest subprime lenders in the United States.

In commodities news, the price of oil has eased about $0.15 to $81.63 a barrel,as production from the Gulf of Mexico resumes after a storm that caused disruptions.

The Russell 2000 (NYSE: IWM) and the Dow (INDU) are higher following news of strong quarterly earnings from major players.

At 10:05 a.m. ET, the small-cap index had added 3.43 points, or 0.42%, to 813.19. The Dow Jones Industrial Average was up 76.09 points, or 0.55%, to 13,842.79.

Trading got off to a bullish start following news that Nike Inc. (NYSE: NKE), the world’s largest maker of athletic shoes, reported a 51% increase in its fiscal first-quarter profit, beating Wall Street’s expectations.

The Beaverton, Ore-based company had a net income of $569.7 million, or $1.12 per share, for the quarter ended Aug. 31, compared with $377.2 million, or $0.74 per share, a year earlier. Analysts were looking for earnings of $0.87 per share.

The tech sector added to the positive sentiment.

Redwood City, Calif.-based software maker Oracle Corp. (Nasdaq: ORCL) also announced better-than-expected fiscal first-quarter results, while mobile-phone chip maker Texas Instruments Inc. (NYSE: TXN) increased its dividend and raised its budget for stock buybacks by $5 billion.

Overseas, the major European indices rose, while Japan’s Nikkei 225 dropped 0.6% but Hong Kong’s Hang Seng Index grew by the same percentage.

In other economic news, investors will be paying attention to the Weekly Leading Index, which will be released by the Economic Cycle Research Institute at 10:30 a.m. ET. The index is considered a leading index of overall economic conditions.

The Russell 2000 (NYSE: IWM) futures are higher and the small-cap index is likely to move up following news of good earnings.

Nike Inc. (NYSE: NKE), the world’s largest maker of athletic shoes, reported that its fiscal first-quarter profit increased 51%, outpacing Wall Street’s expectations. The Beaverton, Ore-based company had a net income of $569.7 million, or $1.12 per share, for the quarter ended Aug. 31, compared with $377.2 million, or $0.74 per share a year earlier. Analysts were looking for earnings of $0.87 per share.

Adding to the bullish mood this morning is Redwood City, Calif.-based software maker Oracle Corp. (Nasdaq: ORCL), which also announced better-than-expected fiscal first-quarter results.

In economic news, investors will be paying attention to the Weekly Leading Index, which will be released by the Economic Cycle Research Institute at 10:30 a.m. ET. The index is considered a leading index of overall economic conditions.

A recent infusion of big-time talent has things looking up for a beaten-down microcap software play in the human resource management sector.

After years of largely profit-less growth, Burlingame, Calif.-based Workstream Inc. (Nasdaq: WSTM) could finally be poised to turn the corner under a recently revamped management team. In February, Deepak Gupta, the former general manager and founder of PeopleSoft’s On Demand software unit, was named chief executive of tiny $56 million Workstream. Prior to PeopleSoft, Gupta was the chief architect of Oracle Corporation’s (Nasdaq: ORCL) hosting business and the global leader for the software giant’s middleware line.

Since the hiring of Gupta, a string of heavy hitters from established enterprise software leaders have also joined Workstream’s executive ranks. This impressive group of new sales & marketing hires hail from Oracle, PeopleSoft, International Business Machines Corp. (NYSE: IBM) and Kronos among other well-known software companies. While it remains to be seen if Gupta can charge up Workstream’s top-line growth and lead this microcap software play to profitability, he certainly has attracted a high-caliber management team that has tasted success before.

Founded a little over a decade ago, Workstream has historically focused its efforts on selling compensation, performance and talent management solutions to large enterprises (over 2,500 employees). Workstream’s 400 customers include such brand names as Wells Fargo & Company (NYSE: WFC), Nordstrom, Inc. (NYSE: JWN), Chevron Corporation (NYSE: CVX), E. I. du Pont de Nemours and Company (NYSE: DD), The Home Depot Inc. (NYSE: HD), the American Red Cross and the U.S. Federal Bureau of Investigation. In a bid to significantly expand its market opportunity, Workstream unveiled last month three new on-demand solutions for mid-sized businesses (between 100 and 2,500 employees). Workstream’s software frees companies from having to manually manage human resources processes using spreadsheets and paper documents for tracking.

Education has been a minefield for investors and has lost much of its luster in recent years. Remember Edison Schools, Inc.? This is the company that was going to revolutionize public school education by managing schools better. Its shares hit a high of $40 before plunging to $0.14 and being taken private at $1.75 a share in 2001. As a private company, it has moved away from managing schools to providing supplemental educational services.

Federal investigations of everything from student loan abuses to inflating enrollment figures hit stocks like Computer Learning Centers, now bankrupt, and ITT Educational Services Inc. (NYSE: ESI), taking the shine off the for-profit publicly traded education company and keeping the sector somewhat undervalued.
 
Some companies are trying to buck this trend. One of them is Nobel Learning Communities, Inc. (Nasdaq: NLCI). The operator of more than 150 private schools in the pre-school through middle school range reported significant double-digit increases in revenue and income for the fiscal third-quarter ended March 31, on top of regular gains in previous quarters. After hovering around $10 for nearly two years, the stock has moved upward in the past six months and now trades above $15, giving NCLI a market cap of $160 million. The 52-week high was $16.34 in March and the low was $9.98 last August.
 
The company has a new $50 million financing in place and is ready to take advantage of growth opportunities. After selling one school in the third quarter, the company announced in May the sale of six schools that had been targeted for sale as part of the company’s divestment of non-strategic assets. The schools that were sold had been a drag on earnings. Net proceeds of $2 million in the six-school sale –  yielding an after-tax gain of $600,000, or $0.05-0.06 a share, for the fiscal fourth quarter ended June 30 – were used to pay down remaining debt under the facility so that the full amount is available for future acquisitions or capital expenditure.

The last thing most small cap investors think of when they look north of the border is for opportunities is Canada’s emerging software industry.

Other than Corel Corp. (Nasdaq: CREL), once a titan in Canada’s equivalent of Silicon Valley outside the country’s capital Ottawa, Canada is not seen as a hotbed of high-technology. But oddly, it is becoming increasingly so. Since the famous worldwide high-tech meltdown in 2001, Canada’s industry has been struggling to recover. And, in recent years, it has recovered considerably. The Conference Board of Canada, the Ottawa-based equivalent of the New York-based board, said just recently in its review of the software industry that nearly two-thirds of emerging software companies reported profits last year, while computer and other technology hardware makers saw their profits soar.

"Profit levels for Canadian computer and electronic product manufacturers nearly doubled last year," it said. Profits hit C$2.1 billion in 2006, with the surge due primarily to dropping capital and material costs. This year, profit margins are forecast to reach 6%, which is just below where they stood during the tech boom (although in real dollar terms, far short of the C$4.3 billion the Canadians profited in 2001).

"This industry is smaller and leaner than it was at the height of the tech boom," says Louis Theriault, director of the Conference Board’s industrial outlook division.

Meanwhile, PricewaterhouseCoopers in Toronto said in a similar review of the fledgling industry that 63% of emerging Canadian software firms were profitable last year, adding that's "good news" and in line with the 65% in 2005, and 56% in 2004.

The report, based on its fourth annual survey of software firms, found that as in past surveys, chief executives officers of these firms continued to predict significant revenue increases for the year ahead.

"However, while the majority of CEOs reported revenue increases of at least 10%, many fell short of their forecast," they found. 

San Jose-based Agile Software Corp. (Nasdaq: AGIL), which makes product life-cycle management software, is being purchased by giant Oracle Corp. (Nasdaq: ORCL) for $495 million in cash, according to news reports this morning.  The deal is expected to be finalized in July.  Shares are down $0.18, or 2%, to $7.08.

Shares of Horsham, Pa.-based Astea International Inc. (Nasdaq: ATEA) are trading lower despite news after Tuesday’s close that the service management solutions company reported a net profit for the first quarter of 2007 of $1.3 million, or $0.36 per share, compared with a net loss of $2.3 million, or $0.64 per share, for the same period in 2006.