Tag - Yhoo

Stocks finished lower today with the Dow ending seven straight trading sessions closing up. The Dow closed down 35 points to 8,881 while the Nasdaq was up 10 point to close at 1,926 and the S&P 500 edged lower by half a point to close at 954.

The Russell 2000 was up just over 3 points to close at 529.

Leading small-cap price gainers include Media General (NYSE:MEG) up 84% on news that its Q2 EPS was $0.90 versus an EPS loss of $25.12 last year. Much of the firm's gains were attributed to cost cutting measures and selling off a Panama City, Florida television station WMBB and Alexandria, Louisiana television station KALB. Both stations were purchased by Hoak Media.

Other small-cap gainers for today include Somaxon Pharmaceuticals (Nasdaq:SOMX) up 31%; Dynavax Technologies (Nasdaq:DVAX) up 24%; and Reddy Ice Holdings (NYSE:FRZ) up 22%.

Small-cap decliners include Hemispherex Biopharma (AMEX:HEB) down 27%; Aaron's Inc. (NYSE:AAN) down 14%; and Fuqi International (Nasdaq:FUQI) down 13% after announcing a proposed public offering of 4.5 million shares of common stock.

*****Fed Chief Ben Bernanke went before Congress yesterday to reassure lawmakers that he has an exit plan for his inflationary monetary policies. And apparently the markets were soothed by his plans, because everything rallied - bonds, stocks and the U.S. dollar. 

Most importantly, Bernanke has been pretty adamant that inflation is not a threat right now. Prices are still falling for homes and commercial real estate. Demand for oil is down. Unemployment is rising. None of these conditions suggests that more money will be entering the economy in the form of spending.  

What's his plan, you ask? He didn't say exactly. But it will involve higher interest rates and hopefully Treasury buybacks. 

*****Interestingly, Congress is very interested in problems with the commercial real estate market and what the Fed plans to do about them. Right now, $108 billion in commercial real estate is either in default, foreclosure or bankruptcy. That's the double the dollar amount since the start of the year.  

I'm not sure exactly what Bernanke can do about this. The Fed and the Treasury have made it possible for banks to make some money. That, in turn, will give the banks more ability to offset bad assets currently on their books and increase loss reserves for looming problems, like commercial real estate.  

But ultimately, we are seeing an actual deflationary spiral in the real estate sector. There's too much supply and not enough demand and prices are falling. Eventually, as we saw with my 7-Eleven story from yesterday, real estate will move from weak hands too small hands. But prices have to be attractive. Also, given my expectation that unemployment will remain high and the U.S. economy will grow weakly for a few years, it's highly likely that some real estate will simply remain dormant.  

*****Earnings season is rolling along. Apple (Nasdaq:AAPL) beat expectations handily. But the company guided revenues for the rest of the year slightly below consensus. I thought that might be a problem, but apparently not. The stock's up 4%, even after a 10% rally last week.  
 
 Yahoo! (Nasdaq:YHOO) and US Bancorp (NYSE:USB) have reversed early losses to trade in the green. After a long consolidation for stock prices, it looks like we might be breaking out for another upside move. But after the move we've seen over the last seven trading days, I can't help but to be a little skeptical.  
 
Best Regards,

Ian Wyatt
Editor
SCI Daily

Battered stocks limped to a dismal Monday close, with the Dow and S&P 500 falling to levels seen in 1997 as investors continue to pull money out on decreased confidence.

“People left and right are throwing in the towel," Keith Springer, president of Capital Financial Advisory Services, told the Associated Press.

The Russell 2000 (NYSE:IWM) closed down 16.38, or 3.99%, to $394.58, while the Dow fell 3.4% to close at a staggering 7,114.94, and the S&P 500 tumbled 3.47% to end the day at 743.33. For the year, the Russell is now down 21%, the Dow is down 18.93% and the S&P 500 is down 17.7%.

News out today that the Treasury Department would start a new, revamped bank bailout program that would include the option of allowing the government to increase its ownership in financial institutions did little to support investor confidence.

Although the Obama administration doused rumors last week of a potential plan to nationalize banks, the Treasury said today that beginning on Wednesday, the 20 largest U.S. banks will be required to undergo a new “stress test.” The government test will determine whether each institution has enough capital to survive any further economic spirals. More details surrounding the stress test will be released on Wednesday by the Treasury, though it did divulge today that if any . . .

Small-cap stocks jumped higher this morning, buoyed by a rush back into bank and financial stocks amid hope that the government will set up a “bad bank” facility to mop up losing bank investments, which would help clear bank balance sheets. In addition, there is a sense that the Obama Administration is moving back toward the original purpose of the TARP of absorbing bad debt paper, a concept that has repeatedly sparked brief rallies in equities. At 9:52 a.m. ET, the Russell 2000 (NYSE:IWM) was up 9.15, or 2.01%, at 464.73.

Financial and bank stocks were the preferred outlet for bulls this morning. Huge percentage gains were seen for a vast array of banks; Citigroup Inc. (NYSE:C) was up 20% shortly after the open, while Wells Fargo & Co. (NYSE:WFC) was up 19%. The KBW Banking Index was up nearly 10%. Of course, it’s easier to generate jaw-dropping percentage gains on stocks that are only a fraction of where they were a year ago.

There is a chance that some of the enthusiasm on the financial and banking front has also been stoked by optimism ahead of this afternoon’s FOMC statement. With the Fed funds rate effectively near zero, one wouldn’t expect FOMC to carry much weight right now, but there is a chance that the Fed could talk up “non-traditional” means of providing liquidity and putting downside pressure on longer-term rates. The FOMC statement is slated for 2:15 p.m. ET.

The focus on banks and hope for quick action on bank balance sheets via troubled asset relief programs from the government might have diverted attention away from gloomy earnings for a bit, but even the earnings news today has some bright spots that are attracting attention. Over across the pond, business software maker SAP AG topped the earnings forecast and helped European shares move toward a . . .

Small-cap stocks fell hard on the opening, pressured by a run of weak guidance projections on recession fears from the flood of quarterly earnings reports and by a steep slide in equity markets around the world overnight. At 9:56 a.m. ET, the Russell 2000 (NYSE:IWM) was down 10.54, or 1.99%, at 520.27.

Even before we got this jolting steep opening slide this morning, it was a wild overnight ride for stock market futures. S&P 500 and Nasdaq futures saw ranges beyond 4% as the market rallied right after Tuesday’s close on solid earnings from Apple Inc. (Nasdaq:AAPL) and Yahoo! Inc. (Nasdaq:YHOO). The strong results from those firms set in motion a big run in the tech sector and even though those gains were relinquished by today’s opening, tech stocks were still outperforming the broad market, which is a switch from recent trends. AAPL was up about 6% and YHOO some 3% on the open. The Nasdaq 100 was down about 1% shortly after the open.

Another positive story on the earnings front came from McDonald’s Corporation (NYSE:MCD), which topped the forecast and rose at the opening, but is now down 1.49%. From a pessimist viewpoint, the bears will say that “Mickey Dees” is the only restaurant people will be able to afford in a prolonged recession.

Outside of the earnings flood, SanDisk Corp. (Nasdaq:SNDK) tumbled some 25% in after-hours trading after Samsung Electronics Co. Ltd. withdrew a $5.9 billion bid for the flash memory card maker. SNDK was down 29% early on.

Earlier this morning, the MBA Mortgage Application Index fell sharply, sinking 16.6% to the lowest point in nearly eight years, which underscores ongoing troubles in the housing market. Mortgage rates upticked into that survey period, which likely hurt the application activity, but with home prices not doing well, secondary mortgage activity remains soft and we already saw single-family home sales collapse to 26-year lows on last week’s economic data. In addition, there are reports that homes . . .

Spinning an identity and driving traffic at one website is difficult enough for many companies, but Internet Brands (Nasdaq:INET) finds security in numbers.

The El Segundo, Calif., company squeezes value out of underutilized websites. Internet Brands has been public for less than a year, with its stock bouncing around November’s lowered IPO price of $8, a starting point for the 48 million shares that was one-third less than the company’s stated expectations of $12.

Two analysts surveyed by Thomson Reuters have Internet Brands as a “buy” or “strong buy,” and believe shares will rise; their median price target is $12.

Shares hit an intraday high of $9.44 on Feb. 7, but sank to $5.37 on July 30, ahead of Internet Brands’ reporting of second-quarter results. On Monday, Internet Brands closed at $6.91.

Internet Brands is a media company operating in the new age of consumer-driven content. While the business models of search engines such as Google (Nasdaq:GOOG) or Yahoo! (Nasdaq:YHOO) reach out on a horizontal plane, Internet Brands is a vertical Web proprietor, drilling down to specific consumer needs and interests.

Many of Internet Brands’ sites were acquired over the past few years and fall into five categories: automotive, travel and leisure, shopping and consumer electronics, home and employment. Its network includes autos.com and apartmentratings.com, along with others that deliver electronic coupons to savvy shoppers, or help freelancers and stay-at-home moms find work. Shopping and employment are recent additions, and management has indicated that it might enter another vertical next year.

Jefferies & Co. analyst Youssef Squali calls the Internet Brands strategy . . .

After opening higher, small caps have cascaded into the red midday, despite a continued sell off in crude from its record levels throughout the session and ahead of second-quarter earnings.

At 12:51 p.m. ET, the Russell 2000 (NYSE:IWM) was down 8.35, or 1.25%, at 657.43, while the Dow was down 63.67, or 0.56%, at 11,224.87.

After breaching a new record level of above $145 a barrel ahead of the July 4th weekend, crude oil futures pulled back sharply today. Crude is off $5.12 to approximately $140 a barrel midday. The commodity is still up some 50% for the year.

Oil prices are seeing downward pressure, as tensions in the Middle East are deflating in the minds of oil traders. Iran's foreign minister Manouchehr Mottaki said in an interview with CNN on Sunday that Iran is now assessing western governments with a new point of view. The Iranian foreign minister also suggested Iran might entertain the idea of a compromise with its nuclear program. Also, the country is expected to meet with the European Union's head of foreign policy surrounding the country’s nuclear program.

Oil also sold off as the dollar rallied. The greenback was buoyed by weak output numbers in Germany and the United Kingdom as well as resistance to sell the dollar in the midst of the G-8 leaders open summit meeting today in Japan.

“For the U.S. dollar, it's a question of a global economic race to the bottom between Japan, Europe and the United States,” Andy Busch, global foreign exchange strategist for BMO Capital Markets, wrote in an email. “Whoever hits first and bounces wins.”  

Bottom fishers were prowling the Street earlier in the session, as valuations have been knocked down to the cheapest level since April. However, probable jitters that prelude second-quarter earnings results seemed to have superseded the low valuations that had clouded investors’ actions earlier today. Quarterly earnings results are expected to begin trickling in Tuesday, as Alcoa kicks off the season. Analysts expect this to be the fourth consecutive quarter of negative earnings. Analysts expect . . .

Small-caps stocks opened higher, but were unable to sustain the bid and slipped into the red shortly after the open. Prices were underpinned by a bounce in European banking stocks as Deutsche Bank rallied after saying they do not need to raise capital, and by analyst comments that the worst is over for European banks on the capital front. However, that support was countered by soft data on the ADP jobs report. At 10:02 a.m. ET, the Russell 2000 (NYSE:IWM) was down 0.47, or 0.07%, at 691.12.

The ADP National Employment Report showed a decline of 79,000 in payrolls, which marked the largest decline since November 2002. In addition, ADP revised last month’s gain downward to 25,000 from 40,000. When the ADP report was released about 8:15 a.m. ET, the news sparked a bounce in Treasury futures, trimmed overnight gains in the dollar against the yen and sparked a pullback in overnight gains in stock index futures. The weak ADP figures were troubling ahead of the big monthly employment report slated for Thursday morning.

Analysts at Goldman Sachs cautioned that the correlation between the ADP report and the actual Labor Department monthly employment release has not been that reliable of late. Goldman said that from January 2000 through October 2007, the ADP served up a much tighter projection of the jobs report, but since then the standard deviation has swelled.

Factory Orders came out at 10:00 a.m. ET, with the headline figure coming in at 0.6%, which was just slightly above the median forecast of 0.5%. The market had little reaction to the factory orders data.

Earlier this morning, the MBA mortgage application survey rose 3.6%, but . . .

Small-cap stocks are expected to open mildly higher after a strong recovery Tuesday afternoon from bear market territory. Stock index futures pulled higher in after-hours trading but gains were trimmed briefly when the ADP payroll report came in weak. The Russell 2000 (NYSE:IWM) was expected to open about 0.3% higher, which would translate to an opening near 693.

European shares were higher overnight, boosted by a bounce in financial shares, spurred by comments from Deutsche Bank that the company does not need to raise additional capital. Analysts at JP Morgan also said that the worst is over for European banks on the capital raising front.

The ADP National Employment Report showed a decline of 79,000 in payrolls, which marked the largest decline since November 2002. In addition, ADP revised last month’s gain downward. The ADP report sparked a bounce in Treasury futures, trimmed overnight gains in the dollar against the yen and sparked a pullback in overnight gains in stock index futures. The weak ADP figures were troubling ahead of the . . .

Small-cap stocks limped into the close, barely clutching onto a smidgeon of the steep morning rise tied to stout monthly retail sales figures. The Russell 2000 (NYSE:IWM) closed up 1.95, or 0.27%, at 719.84, but the advance felt somewhat hollow considering small caps shed 10 handles off the highs.

The day started off in fine fashion for the bulls, as the retail sales report topped analyst forecasts, providing further enthusiasm that was already in place from soft crude oil prices and a firm dollar. The overnight dip in crude oil turned out to be short-lived, however, as black gold pushed back near $137 per barrel in the afternoon, charging about $3 dollars off the levels seen into the stock market open. In addition, new crop corn futures soared to new record highs as flooding damages crop conditions in the heartland.

Despite the recovery in crude oil prices, energy stocks were on the defensive today following a downgrade on energy and an upgrade in the financial arena by Morgan Stanley analysts. Although that recommendation seems to buck the ongoing trends, it worked well today.

Some of the morning excitement in stocks was stoked by fresh news on the proposed acquisition of Anheuser-Busch Cos. Inc. (NYSE:BUD) by Belgian firm InBev, which reportedly has tendered a deal worth $65 dollars a share, or approximately $46.3 billion. Anheuser, the quintessential iconic American brewery, controls nearly half the U.S. beer market, including the top seller, Bud Light. M&A talk tends to lift investor psychology, and big-cap deals are also supportive to small caps on the theory that if there are deals to be done in large caps, there are certainly even more deals to be done for small caps.

Speaking of M&A activity, the late slide in stocks off the highs was also powered by news that talks between Yahoo! (Nasdaq:YHOO) and Microsoft Corp. (Nasdaq:MSFT) broke down without any deal being struck. Shares in Yahoo tumbled about 10% on the news, dragging down large-cap index products and causing . . .

Small-cap stocks opened lower, pressured by a jump in crude oil prices overnight, which keeps concerns about consumer discretionary spending at the forefront. At 10:05 a.m. ET, the Russell 2000 (NYSE:IWM) was down 7.33, or 1%, at 725.68.

The headline figure for existing home sales came in above expectations at 4.89 million versus the projection of 4.85 million. Although that figure was slightly better than expected, stock index futures were little changed immediately after the release. The inventory of homes for sale was up 10.5% to a record high, which may have offset any upbeat reaction to the headline figure.

Crude oil prices bounced overnight, lifted by strikes in France that could block tanker traffic and by residual support from a surprising drop in crude oil stocks in this week’s inventory data. In addition, the dollar was soft against the euro heading into today’s U.S. open, which underpinned crude oil prices.

Stock markets around the world were in a selling mood overnight, which also weighed on U.S. equities on the opening. Although Japan was up 0.2% last night, most of the other major countries were down, with Hong Kong off 1.3%, China down 0.9%, Australia down 1.0%, Singapore down 1.2% and Bombay off 1.5%. The biggest overnight loss was seen in Karachi, which tumbled 4.7% in response to a rate hike by the State Bank of Pakistan.

Large caps in the news this morning included Haliburton Co. (NYSE:HAL), which announced a bid of $3.4 billion for U.K. firm Expro International. This marks two consecutive days of M&A deals in the energy sector, and provides some . . .

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 . . .

Small-cap stocks are expected to open near steady levels after a fairly uneventful overnight session. Heading into the opening, the Russell 2000 (NYSE:IWM) was basically unchanged, as were large-cap index products, which would translate to a Russell opening near 741.

Overseas stock markets were mixed, with Europe hovering near steady levels. Shares in Japan were up 0.35%, Hong Kong was up 0.48% and China down 0.56%.

Crude oil remains front and center on trader radar screens to start the week after setting record highs last week, and rallying again overnight.

The economic calendar is fairly tame this week, but the market will get to respond to the Leading Indicators data this morning at 10:00 a.m. ET. This report is a compilation of April numbers, so it is somewhat “dated” and typically has a limited impact . . .

Small caps gained shallow ground midday on the heels of Fed Chairman Bernanke’s sanguine comments surrounding the aftermath of the credit crisis and banks’ recent abilities to raise capital in response.

At 1:08 p.m. ET, the Russell 2000 (NYSE:IWM) edged up 3.89, or 0.53%, to 739.96 while the Dow gained 51.37, or 0.4%, to 12,949.75.

In a prepared statement to a Chicago Fed conference, Bernanke offered encouraging remarks this morning when he addressed lessons learned from the credit debacle. The Fed Chair said conditions remain delicate and encouraged banks to continue being “proactive” in raising needed capital to create new profit opportunities as the economy and financial markets improve.

“Importantly, capital raising and balance sheet repair allow for the extension of new credit, which supports economic expansion,” Bernanke said.

He also noted that banks that closely monitored valuation inaccuracies of financial instruments fared better.

In economic news, investors shrugged off a slew of downbeat data. The Philadelphia Fed survey clocked in at negative 15.6, which was better than the projection for a decline of 19. That report followed disappointing numbers from the release of Industrial Production and the New York Manufacturing Survey, both of which pointed to a bleak manufacturing activity. Industrial Production was pegged at minus 0.7%, which was below the forecast for a dip of 0.3%. Meanwhile, the NY Manufacturing data came in at minus 3.23 for May, below the forecast for 0.00.

In addition, the Weekly Claims report edged slightly higher to 371,000, which was just above the forecast of 370,000.

Small-cap stocks are expected to open higher Thursday in line with overnight gains in equity index products. The Russell 2000 (NYSE:IWM) was up about 0.2% heading toward the opening, which would translate to about 737.50. Gains in large-cap indices pulled slightly off the overnight highs after manufacturing and jobs data this morning came in soft.

The NY Manufacturing Survey was reported about minus 3.23 for May, which was below the consensus of 0.00, while the Weekly Claims report rose to 371,000 for the latest week, just slightly above the forecast of 370,000.

The data spree continues this morning, with the release of Industrial Production numbers at 9:15 a.m. ET, and the Philly Fed survey at 10:00 a.m. ET. In addition, Federal Reserve Chairman Ben Bernanke is slated to talk about “risk management” at 9:30 a.m. ET.

If the market can open higher this morning, it will be a more important show of support than normal, just to help alleviate jitters stirred by Wednessday’s sharp slide off fresh five-month highs. The Russell 2000 formed a bearish pattern on daily charts . . .

Judging by this week’s business news headlines featuring Microsoft Corp.’s (Nasdaq:MSFT) on again/off again talks to buy Yahoo! Inc. (Nasdaq:YHOO), it would be tempting to surmise that Internet advertising is the only advertising game in town.

But headlines can deceive, or at least distort the true state of affairs in politics, in life and in business. While online advertising is indeed a thriving business, another segment of the advertising industry (arguably as far offline as you can get) is not doing so badly either.

Valassis Communications Inc. (NYSE:VCI) is a company that provides direct mail advertising and marketing services to some 15,000 advertisers worldwide, and business is booming. Fiscal 2007 revenues, helped significantly by the March 2007 acquisition of its rival Advo Inc., grew to $2.24 billion from $1.04 billon in 2006. Net income totaled $58 million in 2007, up from $51.3 million in 2006.

All this from a direct mail company, the kind that puts the inserts in your Sunday paper and fills your mail box (not your email) with those coupon books that some people love and others send straight to the recycling bin.

No matter what you may think of direct mail, advertisers continue to love it, often preferring it to other newer and higher-tech forms of advertising. Eastman . . .

Small-cap stocks posted a solid gain Tuesday, erasing morning losses to climb to the highest daily close since early February. By the close, the Russell 2000 (NYSE:IWM) was up 5.44, or 0.75%, at 729.79.

The impressive recovery move off morning lows generated a bullish outside reversal on daily charts, which helps offset some of the topping pattern formed by Friday’s lower close after making new move highs. It should be noted that downside action on Monday was forged on extremely light volume, which took some of the edge off the lower price action coming into today’s session.

Looking ahead to Wednesday’s session, the market still needs to establish the ability to hold above the 731 zone, which formed a double top back in early February. Clearly, sellers emerged in that area late Tuesday, pulling the index back off the highs. Above that 731 point, resistance is at 735 and 743. If the market starts to struggle, then support is at 726, 720.50 and 715.

Much of the bearish morning tone was linked to overnight losses in Fannie Mae (NYSE:FNM), which tumbled 8% after investors were cool to earnings results and a downgrade in the company’s credit rating. However, Fannie Mae reversed course after a conference call with company officials, and ended up climbing more than 8%. Without that bearish impetus to stir jitters about the mortgage market, credit crunch and banking worries, the bears quickly lost favor. By late mid-morning, . . .

Small-cap stocks had a relatively sleepy pullback Monday, as climbing crude oil prices and a soft dollar offset an upside surprise in economic data from the ISM Non-Manufacturing Survey. The Russell 2000 (NYSE:IWM) dipped 1.39, or 0.19%, to 724.35.

The ISM Non-Manufacturing Survey came in at 52%, which was well above the median forecast for 49.5%, but neither investors nor analysts seemed ready to say that an economic growth trend for the services sector was at hand. The report sparked a brief bid in equities when it was released, but it had very little staying power throughout the day and lost the spotlight as crude oil prices began climbing.

Crude oil prices soared to a fresh record high, zooming past $120 dollars a barrel for the first time. Crude prices have jumped about 9% from last week’s low, and remain a concern for the U.S. economy, consumer spending habits and sentiment heading toward the summer driving season.

Even before the crude oil surge, equities were on the defensive this morning following weekend news that Microsoft (Nasdaq:MSFT) had retracted a bid for Yahoo! Inc. (Nasdaq:YHOO), dulling some of the merger and acquisition hype built up by the recent Mars/Wrigley (NYSE:WWY) deal. Investors pounded Yahoo! shares, which tumbled 15% on the news.

In addition to rising energy prices, other commodity markets were on a roll Monday, with the Commodity Research Bureau Index of a broad swath of physical goods climbing 1.4%, with copper prices soaring 3% to a record peak amid supply disruptions out of Chile and a lift from the ISM data. With crude oil prices and other . . .

Small-cap stocks began Monday in the red and have continued slipping in afternoon trading. The wave of selling was partially staved off by a better-than-expected non-manufacturing survey, but has not been able to break the 725 mark since about half-past 10 a.m. ET. At 1:40 p.m. ET, the Russell 2000 (NYSE:IWM) was down 2.35, or 0.32%, at 723.39.

The ISM Non-Manufacturing Survey came out at 52%, which was well above the median forecast of 49.5%, and the highest point since December. The reading also snapped three consecutive months of contractions, which is a plus for the economic outlook.

News that Microsoft (Nasdaq:MSFT) abandoned its takeover bid for Yahoo! (Nasdaq:YHOO) kept investors gloomy during the first session of the week. Yahoo shares dipped on the news, sinking as much as 18% in early trading, but down about 13% in afternoon trading. Several reports over the weekend suggested the deal might go through and Wall Street was evidently disappointed with the end result.

The dollar/commodities inflation front was a source of concern for equity bulls this morning. Crude oil prices jumped back above $117 dollars a barrel overnight . . .

Small-cap stocks started out the week in the red, but the early dip in equities did not live up to the selling interest suggested by overnight trends and a surprisingly stout ISM Non-Manufacturing Survey sparked a bout of buying that lifted stocks back toward steady levels. At 10:01 a.m. ET, the Russell 2000 (NYSE:IWM) was down 1.05, or 0.1%, at 724.69.

The ISM Non-Manufacturing Survey came out at 52%, which was well above the median forecast of 49.5%, and the highest point since December. The reading also snapped three consecutive months of contractions, which is a plus for the economic outlook.

The market had a bit of the merger blues this morning after weekend news that Microsoft (Nasdaq:MSFT) pulled out of negotiations for a takeover bid of internet services company Yahoo! Inc. (Nasdaq:YHOO). Yahoo shares took it in the chin on the news, sinking 18% in early trading Monday. The deal was reportedly close to fruition and the failure to close might take some excitement out of the M&A picture — at least in the short run. That said, wireless phone company Sprint (NYSE:S) was up 7% on news that the firm could be a takeover target.

Marvel Entertainment Inc. (NYSE:MVL) shot up nearly 8% this morning . . .

Small-cap shares are expected to open in the red Monday, weighed down by weekend news that Microsoft Corporation (Nasdaq:MSFT) has withdrawn an offer to takeover Yahoo! Inc. (Nasdaq:YHOO), which could dull some investor enthusiasm about the immediate future of merger and acquisition deals just days after the Mars/Wrigley (NYSE:WWY) deal stoked merger hype. In the immediate fallout of the news, Yahoo was down 15%, while Microsoft was up 2%.

The Russell 2000 (NYSE:IWM) was trading down about 0.4% in after-hours action, which would translate to a cash opening just below 723. Overseas stock markets were mixed to lower, with the European DJ Stoxx 50 down 0.4%, and Hong Kong’s Hang Seng down 0.2%. However, U.K. and Japan markets were closed for a holiday, so volume was lighter than usual.

The ISM Manufacturing Survey, which is arguably the largest economic report of the week, comes out this morning at 10:00 a.m. ET, and will likely help establish a trading direction for equities.

The dollar was down overnight against the euro and versus the yen, which also could weigh bullish psychology into this week’s action. Crude oil jumped . . .

Small-cap stocks are expected to open lower, in line with a 0.3% decline in after-hours trading on the Russell 2000 (NYSE:IWM) that would translate to an opening near 701.50 in the cash index.

Although Asian stocks were higher overnight, European equities turned down slightly ahead of the U.S. opening, which tugged stock index futures into the red. Bank stocks in Europe remain a bearish target amid massive debt write-downs and efforts to raise capital. Within the financial arena, bond insurer Ambac Financial Group (NYSE:ABK) took a 5% hit overnight on soft earnings, which helped counter positive news from Broadcom Corp. (Nasdaq:BRCM) after they handily beat the earnings forecast. Upbeat profits from search giant Yahoo! Inc. (Nasdaq:YHOO) were seen as not enough to bolster a takeover bid from Microsoft Corp. (Nasdaq:MSFT), and therefore did not ignite a bullish response in overnight trade.

Traders will continue to keep an eye on the U.S. dollar today after the Dollar Index tumbled to one-month lows yesterday and cash euro/dollar values hit record highs. In addition, crude oil is on the radar screen after hitting record highs yesterday and prompting an 11% collapse in the Amex Airline Index, bringing it to record . . .

After years of mismanagement, the combination of an experienced new CEO and the adoption of a new financial reporting technology have things looking up for this financial data and information provider.

Founded 11 years ago, back before the first dot-com boom, EDGAR Online, Inc. (Nasdaq: EDGR) was the first company to make U.S. Securities and Exchange Commission (SEC) filings available in real-time on the Web. Norwalk, Conn.-based EDGAR leveraged this early-mover advantage into a subscription-driven business largely focused on the consumer market. Faced with a host of competitors and increasing pricing pressure, though, EDGAR’s revenue stayed flat at around $16 million a year from 2002 to 2006, and sustained profitability proved elusive.

Over the years, EDGAR’s founding management gained a reputation for broken promises and the stock languished. At the Tuesday’s closing price of $2.73 a share, EDGAR’s stock is down over 40% from where it traded at two years ago. Shares have traded between $2.04 and $3.65 over the last 52 weeks. Frustrated EDGAR shareholder Basil Regan, of Regan Partners, took matters into his own hands in February of last year when he announced plans to shake up EDGAR’s board of directors and management. EDGAR responded to the shareholder pressure by naming two new independent directors and plans to hire a new company president.

These moves averted a proxy contest by Regan Partners and, in April 2007, EDGAR named Philip Moyer, a former Microsoft Corporation (Nasdaq: MSFT) executive, as its new president.  Only a few months later, in August 2007, with the resignation of EDGAR CEO and co-founder Susan Strausberg, Moyer took over the top spot as well. Moyer finished his 15-year career at Microsoft as the general manager for its professional services industry. Moyer’s arrival at once-sleepy EDGAR is a good endorsement and seems particularly well timed to boot.

The Russell 2000 (NYSE: IWM) posted a rise on a quiet day that saw investors go bargain hunting. The small-cap index advanced 0.85 points, or 0.12%, to 699.75. The Dow Jones Industrial Average (INDU) climbed 57.88 points, or 0.48%, to 12,240.01.

On a year-to-date basis, the Russell 2000 has let go 8.65%, while the Dow has retreated 7.73% and the S&P 500 has declined 8.80%.

Trading began on a bearish note but the bulls returned during the second half of the session as investors took a second look at stocks that had declined for four of the past five days.

The futures were pointing up and the Russell 2000 opened in the green but stayed there only minutes, weighed down by news of more credit problems stemming from the slump in the U.S. housing sector.

Insurer American International Group Inc. (NYSE: AIG) announced that it may have to write off billions in mortgage debt and would need to change the way it values its credit default swaps involving collateralized debt obligations.
That news hurt financials, with shares of insurance companies being among the biggest losers today.

The small-cap index dropped to its lowest levels during today’s session at about 10:20 a.m. ET, but began a choppy ascent into positive territory at about 1 p.m. ET.

With little on the economic front, news that Sunnyvale, Calif.-based Yahoo! Inc. (Nasdaq: YHOO) rejected a $42 billion takeover bid from Microsoft Corp. (Nasdaq: MSFT) grabbed the headlines.

The Redmond, Wash.-based software giant is expected to make an improved offer.

The Russell 2000 (NYSE: IWM) has stayed in the green, extending a rebound from its morning lows. At 2:49 p.m. ET, the small-cap index had climbed 2.18 points, or 0.31%, to 701.08. The Dow Jones Industrial Average (INDU) had added 30.16 points, or 0.25%, to 12,212.29.

The bulls have returned to Wall Street as stocks shake off their earlier losses and investors go bargain-hunting. The Russell 2000 moved into positive territory shortly before 1 p.m. ET, after spending the first half of the session in the red following news of more credit problems stemming from the stagnating U.S. housing sector.

Insurer American International Group Inc. (NYSE: AIG) announced before the start of trading that it may have to write off billions in mortgage debt and would need to change the way it values its credit default swaps involving collateralized debt obligations.

Elsewhere, Sunnyvale, Calif.-based Yahoo! Inc. (Nasdaq: YHOO) reported before the opening that it will reject a $42 billion takeover bid from Microsoft Corp. (MSFT), arguing that the offer is too low.

The Russell 2000 (NYSE: IWM) has recovered from earlier losses and is now above its starting position.

At 12:57 p.m. ET, the small-cap index had added 0.84 points, or 0.12%, to 699.74. The Dow Jones Industrial Average (INDU) was up 36.83 points, or 0.30%, to 12,218.96.

Stocks small and large have turned the corner despite a bearish start due to more credit problems stemming from the stagnating U.S. housing sector.

Insurer American International Group Inc. (NYSE: AIG) announced before the start of trading that it may have to write off billions in mortgage debt. The New York-based company said in a regulatory filing that it would need to change the way it values its credit default swaps involving collateralized debt obligations.

The Russell 2000 opened in positive territory but slipped within minutes.

Elsewhere, Sunnyvale, Calif.-based Yahoo! Inc. (Nasdaq: YHOO) reported before the opening that it will reject a $42 billion takeover bid from Microsoft Corp. (MSFT), arguing that the offer is too low. Analysts expect that Microsoft will sweeten its bid.

The small-cap index managed to rebound after falling to a level of 691 at about 10:15 a.m. ET, rising above the flat line at about 12:40 p.m. ET.  

The Russell 2000 (NYSE: IWM) and the other major U.S. indices are in the red despite news of the latest corporate deal making.

At 10:13 a.m. ET, the small-cap index had dropped 7.39 points, or 1.06%, to 691.51. The Dow Jones Industrial Average (INDU) was down 98.11 points, or 0.81%, to 12,084.02.

Search engine Yahoo! Inc. (Nasdaq: YHOO) will reject a bid from Microsoft Corp. (MSFT), the Sunnyvale, Calif.-based company announced before the start of trading.

“Microsoft’s proposal substantially undervalues Yahoo!,” the search engine said in a statement.

The deal was initially valued at about $45 billion but has since decreased to about $42 billion as the price of Microsoft’s shares have fallen. The Redmond, Wash.-based software giant is expected to take its offer directly to Yahoo!’s shareholders.

A merger between the two companies would create a more muscular rival to online search and advertising leader Google Inc. (Nasdaq: GOOG).

More mergers and acquisitions news is coming from networking solutions provider Nortel Networks Corp. and telecommunications heavyweight Motorola Inc. (NYSE: MOT), which are in talks to merge their wireless infrastructure divisions, according to The Wall Street Journal.

There are no economic report releases to navigate on Monday, and outside volatility looks calm until we get to Wednesday morning’s Retail Sales report. Look for support Monday at 688 and 680, while resistance is at 712 and 721.

The Russell 2000 (IWM) and the other major U.S. indices lost big today as news of a steep decline in the services sector led to recession fears. The small-cap index let go 21.88 points, or 3.02%, to 701.58. The Dow Jones Industrial Average (INDU) was off 370.03 points, or 2.93%, to 12,265.13.

On a year-to-date basis, the Russell 2000 has shed 8.41%, while the Dow has retreated 7.54% and the S&P 500 has shed 8.97%.

The bears ran the show today as news of an unexpectedly deep drop in U.S. services in January sparked a sell-off.

The Institute for Supply Management said that its index of non-manufacturing dropped to 41.9 in January from 54.4 in December. The result is far worse than the one expected by economists. A reading above 50 is a sign of growth.

Services comprise about 75% of U.S. gross domestic product and a decline would surely throw off an economy already beset with a slump in the housing sector, a credit squeeze and a pullback of consumer spending into recession.

Or maybe a recession has already started.

Either way, investors reacted to news of the biggest one-month decline in services in seven years by selling everything in sight. The makers of construction and raw materials suffered the most, follower by insurance companies and those manufacturing agricultural machinery. No single group of stocks posted a gain.

Separately, Banc of America Securities contributed to the bearish mood when it downgraded Yahoo! Inc. (Nasdaq: YHOO) to “neutral” from “buy.”

The Russell 2000 was trending down during the entire session, skidding to its lowest level at the close.

The Russell 2000 (NYSE: IWM) is posting a large decline on news that the U.S. services sector suffered an unexpectedly sharp drop in January.

At 10:06 a.m. ET, the small-cap index was down 8.34 points, or 1.15%, to 715.12. The Dow Jones Industrial Average (INDU) had let go 197.53 points, or 1.56%, to 12,437.63.

The Institute for Supply Management’s monthly non-manufacturing index fell to a reading of 41.9 in January from its previous level of 54.4, the trade association reported this morning.

That’s a much steeper decline than the one forecasted by economists. New orders, employment and inventories all saw a decline.

In corporate news, the bears are reacting to Banc of America Securities’ downgrade of search engine Yahoo! Inc. (Nasdaq: YHOO) to “neutral” from “buy,” due to concerns about its ability to compete with Google Inc. (Nasdaq: GOOG) in online advertising.

The Russell 2000 (NYSE: IWM) futures are down and the small-cap index will open with a drop on news of a tech sector downgrade.

Stocks small and large are pointing to a lower opening on news that Banc of America Securities has downgraded Yahoo! Inc. (Nasdaq: YHOO) to “neutral” from “buy,” saying that the Sunnyvale, Calif.-based search engine is struggling to revive its online advertising business and compete with rival Google Inc. (Nasdaq: GOOG).

Additionally, Banc of America Securities thinks that the proposed $45 billion dollar buyout acquisition of Yahoo! by Microsoft Corp. (Nasdaq: MSFT) could face regulatory hurdles, particularly in the 27-member European Union.

Investors will be looking ahead to the Institute for Supply Management’s report on the service sector in January, due at 10 a.m. ET. Economists are expecting to see a small decrease.

The Russell 2000 (IWM) posted a big gain as news of a $45 billion bid for Yahoo! overshadowed bearish economic reports. The small-cap index soared 17.20 points, or 2.41%, to 730.50, outpacing the other major U.S. indices. The Dow Jones Industrial Average (INDU) advanced 92.83 points, or 0.73%, to 12,743.19.

Despite two days of big jumps, on a year-to-date basis, the Russell 2000 has lost 4.64%, while the Dow has let go 3.93% and the S&P 500 has shed 4.97%.

Small-cap stocks spearheaded the rally following news that Microsoft Corp. (Nasdaq: MSFT) made an unsolicited $44.6 billion bid for Yahoo! Inc. (Nasdaq: YHOO). That comes to a price of $31 per share, 62% above the stock’s closing level on Thursday.

The Redmond, Wash.-based software giant is trying to grow its online advertising business by buying the troubled search engine company, which has been shedding jobs and may not have the billions necessary to compete with hegemon Google Inc. (Nasdaq: GOOG).

If Microsoft and Yahoo!, who have held collaboration talks in the past, join forces, the combined company will likely be better positioned to compete against Google.

The news made investors bullish and the Russell 2000 and the Dow rose out of the gate and continued trending upward until shortly after 10 a.m. ET.

The buying spree was apparently blunted by news that U.S. construction spending contracted a more-than-expected 1.1% in December, according to the Census Bureau. The decline was led by a 2.7% decrease in residential construction.

The Russell 2000 (NYSE: IWM) is posting solid gains while the Dow is flat on news of generally bearish economic data and a bid for Yahoo!. At 1:15 p.m. ET, the small-cap index had advanced 6.44 points, or 0.90%, to 719.74. The Dow Jones Industrial Average (INDU) was up 16.09 points, or 0.13%, to 12,666.45.

Small-cap stocks have eased from their spectacular early-session gains but are still posting solid increases as investors focus on news that Microsoft Corp. (Nasdaq: MSFT) made an unsolicited $44.6 billion bid for Yahoo! Inc. (Nasdaq: YHOO) and disregard mixed economic reports.

The bulls are in control today on news that Yahoo! has received an unsolicited bid from Microsoft to sell itself for $31 per share.

The price is 62% above the stock’s closing level on Thursday and serves as a testament of the software maker’s intense desire to expand its online advertising business and challenge the dominance of Google Inc. (Nasdaq: GOOG).

Meanwhile, the economic data released this morning confirm that a slowdown is at hand as the housing sector continues to stagnate.

The U.S. Labor Department announced before the start of trading that payrolls unexpectedly fell 17,000 in January, while the figure for December was revised up by 64,000 jobs. The overall unemployment rate slipped to 4.9% from 5%.

The Russell 2000 (NYSE: IWM) is the strongest gainer following news that Microsoft has made a $44 billion bid for Yahoo!.
 
At 10:07 a.m. ET, the small-cap index had climbed 14.38 points, or 2.02%, to 727.68. The Dow Jones Industrial Average (INDU) had advanced 111.12 points, or 0.88%, to 12,761.48.

Futures were pointing up and trading began on a bullish note following news that software giant Microsoft Corp. (Nasdaq: MSFT) made an unsolicited $44.6 billion bid for troubled search engine Yahoo! Inc. (Nasdaq: YHOO), according to the two companies this morning.

“We have great respect for Yahoo!, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market,” said Microsoft CEO Steve Ballmer in a statement before the opening.

The bid comes to $31 per share, a 62% premium over Yahoo!’s closing price on Jan. 31 and is an attempt by Microsoft to expand its online advertising business and challenge the dominance of Google Inc. (Nasdaq: GOOG).

Sunnyvale, Calif.-based Yahoo!, which has been losing the online search battle with rival Google and recently had to cut jobs, said in a statement that it is evaluating the proposal.

The Russell 2000 (NYSE: IWM) futures are higher and the small-cap index will open higher on news of a major tech deal.

Software giant Microsoft Corp. (Nasdaq: MSFT) has made an unsolicited $44.6 billion bid for troubled search engine Yahoo! Inc. (Nasdaq: YHOO), according to the two companies this morning.

Sunnyvale, Calif.-based Yahoo!, which recently cut jobs and saw its chairman step down, said in a statement that it is evaluating the proposal.

“We have great respect for Yahoo!, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market,” said Microsoft CEO Steve Ballmer in a statement.

The bid comes to $31 per share, a 62% premium over Yahoo!’s closing price on Jan. 31 and is an attempt by Microsoft to expand its online business and challenge the dominance of Google Inc. (Nasdaq: GOOG).

News of the potential buyout energized the bulls and lifted futures as investors appear to be disregarding disappointing economic news.

The U.S. Labor Department reported this morning that payrolls unexpectedly fell in January. The figure for December was revised up.

Nonfarm payrolls fell 17,000 in January, defying economists’ projections of an increase. That’s the first drop in more than four years and the latest sign that the U.S. economy is experiencing a slowdown in growth.

Today, we look at a trio of stocks that could be considered micro-caps, as their market capitalizations are all well below the $100 million mark. Given their small size, readers should be aware of the inherent risks; nevertheless, not only is each selected by a top newsletter, each is also selected as a favorite speculative stock for the coming year.
 
Tony Sagami, editor of The Asia Stock Alert, says “My favorite speculative, home-run idea for 2008 is Man Sang Holdings, Inc. (AMEX: MHJ).” 
 
“I run at a pretty fast pace when I’m in Asia as every day is packed with factory tours,” Sagami says. Despite this hectic schedule, he says, “When I was in China in May, I postponed my entire South China schedule because what should have been a one hour meeting at Man Sang turned into two full days of tire kicking and fact checking.
 
“Man Sang Holdings is one of the leading pearl merchants in Greater China. The company primarily sells in the U.S., Europe, and Asia such as QVC,” he says. “I’m not talking about a fly-by-night, newbie business. This company has been operating for decades ... and it’s been extremely profitable over the years.
 
“I’ve been doing this for 23 years,” he says, “and Man Sang Holdings is the most undervalued stock market bargain I have ever seen. I consider this an undiscovered gem.”
 
Tom Bishop, editor of BI Research, says, “My favorite speculative idea for 2008 is NutraCea (OTC: NTRZ).”

Rice, he explains, is the most consumed food on the planet and NutraCea has found a way to process rice bran into an “extraordinarily nutritious food ingredient/nutraceutical.  
 
“Companies such as General Mills, Inc. (NYSE: GIS), Sara Lee Corp. (NYSE: SLE), Archer Daniels Midland Company (NYSE: ADM) and Purina want to boost the nutritional value of their products.” He says that over 500 companies have signed confidentiality agreements with NutraCea to look into reformulating their products.