Tag - Panl

The Russell 2000 (NYSE: IWM) began in the green but soon fell deep into the red on news of problems at Bear Stearns.

At 10:05 a.m. ET, the small-cap index was down 13.77 points, or 2.03%, to 665.94. The Dow Jones Industrial Average (INDU) had shed 208.17 points, or 1.71%, to 11,937.57.

Stocks opened in positive territory on news before the opening that consumer prices surprisingly stayed put in February, according to the U.S. Labor Department. The core index, which excludes the costs of food and energy, was also unchanged. Economists were expecting both measures to rise 0.2%.

The numbers make it easier for the U.S. Federal Reserve to lower interest rates when it next meets on March 18; however, consumer prices have increased 4% on a year-over-year basis, above the Fed’s preferred range of between 1% and 2%.

The bullish sentiment evaporated quickly, though, on news that J.P. Morgan Chase & Co. (NYSE: JPM) and the New York Federal Reserve will loan money to Bear Stearns (NYSE: BSC) to help it deal with its liquidity problems.

Bucking the negative trend is Exelixis Inc. (Nasdaq: EXEL). The biotechnology company reported before the start of trading that Genentech Inc. (NYSE: DNA) has exercised the option to further develop and market Exelixis’ experimental cancer drug XL518.

Silicon may be the compound that made electronics famous, but the rising star on the scene is sapphire and Rubicon Technology, Inc. (Nasdaq: RBCN) is the new leading light. Founded in 2000 and public only since Nov. 20, this Franklin Park, Ill.-based small cap is in the interesting business of growing sapphires for electronic and electro-optical circuits.

Sapphire has some great qualities that can be used in conjunction with silicon circuitry. A pure sapphire is crystal clear, made from aluminum oxide. It can be grown and cut into wafers, much the way silicon wafers are made, and has different chemical, electrical and physical properties when cut in different orientations. In different configurations, the wafers are used to make light-emitting diodes (LEDs), radio-frequency integrated circuits (RFICs) and blue laser diodes. Silicon circuitry can be laid on top of sapphire wafers (silicon-on-sapphire, or SOS) for electro-optical chips.

The Russian government began developing techniques years ago for growing sapphire crystals to use in military and aerospace applications. Rubicon, whose chief scientist is Russian, has refined those techniques into a proprietary process that allows it to create the largest and purest sapphire wafers on the market.

Rubicon can make crystals with fewer than 100 defects per square centimeter, compared to defect rates of 5,000 to 100,000 defects per centimeter with other manufacturing methods. It is the only manufacturer that can reliably make six-inch diameter wafers, while others are still stuck at two inches and four inches, and is expected to start producing eight-inch wafers within 18 months. Just as in silicon wafers, the larger sizes sell at higher margins but reduce the final chip costs dramatically.

The Russell 2000 (NYSE: IWM) futures are falling on news of a worse-than-expected December jobs report and the small-cap index will surely drop.

Nonfarm payroll employment increased a disappointing 18,000 in December, the U.S. Labor Department reported. Job losses in construction and manufacturing offset gains in several service-providing industries.

Economists were expecting to see 70,000 new jobs. However, the payroll gain in November was revised up to 115,000 from an initially reported 94,000.

Nevertheless, the slowdown in job creating is an obvious sign that U.S. economic growth is faltering amid tighter credit and the ongoing slump in the housing market.

The unemployment rate climbed to 5% from the previous level of 4.7%. Economists were forecasting a smaller rise to 4.8%.

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:

• Osiris Therapeutics, Inc. (OSIR), up 27% on news it won a $224.7 million contract from the U.S. Department of Defense.
• Prospect Capital Corp. (PSEC), up 9%.
• NxStage Medical, Inc. (NXTM), up 9%.

Biggest percentage losers:

• Micrel, Inc. (MCRL), down 15% on news it has revised its earnings and revenue outlook for the fourth quarter of fiscal 2007.
• Landec Corp. (LNDC) down 8% on news that fiscal second-quarter revenue missed analysts’ expectations.
• Universal Display Corp. (PANL) down 6%.