Tag - Wins

Small-cap stocks finished off one of the worst months in history with a four-day rally fueled by improving credit conditions, month-end bargain hunting and a willingness by investors to look beyond current weak economic fundamentals. The Russell 2000 (NYSE:IWM) closed up 4.53%. Today’s small-cap gainers are SM&A (Nasdaq:WINS), MGIC Investment (NYSE:MTG) and Gramercy Capital (NYSE:GKK).

Other Market Watch highlights today included:

• The Russell is now down 30% for the year. The Dow is down 30% for 2008, while the S&P 500 is off 34%. 
• Financial stocks played a key role in the rally today, after lagging on some bounce attempts earlier in the week. The Financial Select Sector SPDR Fund rose 3.3%.
• Small- and mid-cap banks and financial institutions were noted all along the top percentage movers today on various exchanges. 
• Crude oil prices rallied in the final 30 minutes of trading today, but gains in the commodity arena were hampered by a firm tone in the U.S. dollar, which gained about 1.3% against the euro.

Small Cap Gainers:

• SM&A jumped 126% on news that the firm will be purchased by Odyssey Investment Partners for $6.25 a share. See (Nasdaq:WINS).
• Wisconsin Energy to replace MGIC Investment in S&P 500. MGIC shares closed up over 60%. See (NYSE:MTG).
• Gramercy Capital reported 34% Q3 rise in funds from operations, halts dividends. Shares closed up 79%. See (NYSE:GKK).  
• Sonic Automotive reported losses in Q3 but shares closed up a whopping 41%. See (NYSE:SAH).
• China Eastern Airlines Corp. Ltd. gapped higher and soared 27%. See (NYSE:CEA).

Small Cap Losers:

• Penson Worldwide Inc. closed down 40% on news that a subsidiary has incurred a $15.5M unsecured receivable from a firm that has ceased operations. See (Nasdaq:PNSN).
• Bare Escentuals Inc. gapped lower and shed some 40% on soft earnings news. See (Nasdaq:BARE).  
• Sunrise Senior Living announces transaction has been terminated. Shares . . .

In an ironic twist, small-cap stocks finished off one of the worst months in history with a four-day rally fueled by improving credit conditions, month-end bargain hunting and a willingness by investors to look beyond current weak economic fundamentals. The Russell 2000 (NYSE:IWM) closed up 23.32, or 4.53% at 537.49 and is now down 30% for the year. The Dow is down 30% for 2008, while the S&P 500 is off 34%.

Central bank officials around the globe slashed interest rates this week (and more are expected next week as well) and the inter-bank lending rate continued to slip lower, suggesting that banks are now more comfortable and trusting and that perhaps the worst of the credit crisis for financial firms is in the rear-view mirror. The Libor rate has declined 14 consecutive trading sessions, tumbling from more than 5% to 3%, spurring hope that various central bank rate cuts and federal bail-out packages have helped unclog credit lines.

Financial stocks played a key role in the rally today, after lagging on some bounce attempts earlier in the week. The Financial Select Sector SPDR Fund rose 3.3%. Large-capper JPMorgan Chase and Co. (NYSE:JPM) rallied 6% as the firm said it would restructure procedures for some $110 billion in mortgages and would halt foreclosure actions. Small- and mid-cap banks and financial institutions were noted all along the top percentage movers today on various exchanges.

Stocks also received a lift from asset allocation trades out of Treasury markets and into equities, Nick Kalivas, vice president of financial research with MF Global, said in an email.

“Regional small-cap banks performed well today,” Kalivas said. “I think easing credit tensions helped. REITS also traded strongly today. Vornado (NYSE:VNO) boosted its dividend and it helped the entire sector while giving some confidence . . .

Small-cap stocks staged an impressive rally into midday trading, bolstered by signs of thawing in the credit market freeze, month-end bargain hunting and a renewed appetite for riskier market bets amid hope that the October collapse in equities has already priced in the worst of the economic news. At 12:20 p.m. ET, the Russell 2000 (NYSE:IWM) was up 13.14, or 2.56%, at 527.32, on target for a fourth consecutive daily gain, something that hasn’t happened in five months.

Speaking of riskier bets, the top performing broad market sector so far today has been casinos, followed up by homebuilders, semiconductor equipment, airlines, insurance brokers, construction materials, wireless telecoms and health care services. On the downside, photo products, hotels, agriculture products, metal and mining stocks and gold shares were out of favor.

Inter-bank lending rates have tumbled to the 3% zone, down some 14 consecutive trading sessions, and well off the peak above 5% at the beginning of October when mistrust and fear spiked up lending rates among banks as the credit crisis fueled a run of disasters among large financial companies. During today’s rally, financial stocks were doing well, with the Financial Select Sector SPDR Fund up 2.7%.

Energy and commodity shares were a drag on the market, with the Energy Select Sector SPDR Fund down 0.3% while crude oil prices edged lower on concerns about the demand picture amid a global economic slowdown. The commodity story also was pulled down today by a resurgent U.S. dollar, with the greenback up 1.3% against the euro.

A bevy of economic reports this morning were basically in line with expectations, save for a dour reading on Midwest manufacturing seen in the Chicago purchasing manager’s survey, which tumbled to 37.8, way below the forecast of . . .

The Russell 2000 had a tame session Wednesday, gaining 2.76, or 0.41%, ending at 683.74. Price action the last several sessions has been sloppy after yet another double top on daily charts back on Feb. 27. Look for support today at 677 and 670. There is minor support below there at 666 and 660, but a decisive breach of 670 opens the door to test the recent low down at 650. On the upside, resistance comes in at 692, then at 701 and 712.

This morning's weekly claims report at 8:30 a.m. ET might attract a little more interest than this report usually would garner, just because we’re facing the big unemployment release Friday.