Tag - Ravn

Small-cap stocks went into a tailspin on the opening as runaway inflation, weak housing starts and the never-ending credit crunch saga cast a bearish pall over the market. At 9:55 a.m. ET, the Russell 2000 (NYSE:IWM) was down 8.53, or 1.15%, at 733.44.

The inflation horizon became more troubling this morning when the Producer Price Index report came out at 1.2%, which was way ahead of the forecast for a rise of 0.6%. The headline figure marked the largest year-over-year rise in 27 years. Recently, investors have tried to shrug off inflation worries, saying that the data is back-dated and that the biggest inflation ingredient — energy — has been on the decline in late July and in August. However, today’s “core” rate of inflation, which excludes food and energy prices, was up a stunning 0.7%, which was far beyond the forecast for a rise of 0.2%. The year-over-year rise in the core rate was the fastest since 1991. Although you can argue that tracking inflation without including energy and food prices is somewhat silly, one thing the core rate shows us today is that inflation is creeping into other areas than just at the gas pump and in the grocery sack.

Rubbing a little salt in the wound was the Housing Starts report, which came out at the same time as the PPI and which also was a disappointment. The headline for housing starts was down 11.0%, slack compared with the forecast for a decline of 9.9%. The rate of July housing starts was at 965,000 units, which marked the lowest level since March 1991. So, housing starts are at 17-year lows and inflation is at 27-year lows. With many market watchers saying that a recovery in the housing market is a necessary start to a recovery in the financial/credit crisis, the numbers today did nothing to help further the bullish argument.

“With sales still soft, and with lending standards tighter, single family housing starts will contract even further,” Steven Wood, chief economist with Insight Economics, said in an email. “Housing’s contribution to economic growth will be . . .

Small-cap shares hovered near steady levels in a relatively calm start to the week, as the market appeared to be waiting for more dramatic news to stir volatility into the mix. For now, investors appear to be juggling concerns about record crude oil prices and top-heavy signals on charts against positive money flow into equities. At 10:03 a.m. ET, the Russell 2000 (NYSE:IWM) was down 1.14, or 0.15%, at 740.04. Small-caps were slightly soft early on compared with large-cap index products, which is a minor cautionary signal.

The Leading Indicators report came in up 0.1% for April, which was slightly better than the forecast, and up from a decline in both March and February. The data had very little immediate impact on trading, as the report is a compilation of “dated” information on the economy.

Crude oil pushed to a fresh record high this morning, and remains a troubling element for the market and the economy in general as consumers are forced to use discretionary money to pay for gasoline at the pump. In Chicago, pump prices have now climbed above $4 dollars a gallon, a prickly price zone right in front of the peak summer driving and holiday season in the United States.

The relatively tame start to the U.S. trading session mirrored overseas markets, which were narrowly mixed. Europe shares were hovering near steady levels into the U.S. open, while Asia stocks posted slight gains and losses depending on the country . . .

Industrial manufacturer Raven Industries, Inc. (Nasdaq: RAVN) reported second-quarter results just above the sole analyst estimates.

For the three months ended July 31, the Sioux Falls, S.D.-based company recorded net income of  $5.8 million, or $0.32 per share, one penny above the sole analyst polled by Thomson Financial of $0.31 per share. This compares with net income of $5.1 million, or $0.28 per share, for the same period last year.

Revenue increased 10% to $55.7 million helped by contributions from Raven's Flow Controls Division, compared with revenue of $50.4 million for the second quarter last year. The Street had anticipated sales of $52.55 million.

Shares of Raven gained 5.24%, or $1.89, to $37.98 out of the gate.