Two in a row for small caps
April 13 (SmallCapInvestor.com) – Stocks closed the day in positive territory as an upbeat profit forecast from pharmaceutical giant Merck overshadowed an earlier report of a drop in U.S. consumer confidence. In small cap action, shares of Medis Technologies Ltd. (Nasdaq: MDTL) rose on news the company made sales to Microsoft, while news of a buyout lifted Cutter & Buck Inc. (Nasdaq: CBUK).
The Russell 2000 rose for the second straight day, adding 4.33 points, or 0.53 percent, to 819.38. The Dow Jones Industrial Average rose 59.17 points, or 0.47 percent, to 12,612.13.
Shares of fuel cell technology developer Medis Technologies ended the day among the winners following news Microsoft purchased the company’s 24/7 fuel cell Power Packs. Today marks the first commercial sales in quantities of any consumer fuel cell product, New York-based Medis said after the opening bell. Shares gained $2.03, or 11.10%, to close at $20.32.
Minneapolis, Minn.-based Urologix, Inc. (Nasdaq: ULGX), a maker of medical products for the treatment of urological disorders, lost ground on news it expects to post a net loss in the third quarter. Revenue is forecast at about $5.1 million for the quarter ended March 31, below Wall Street’s expectation of $6.2 million, Urologix said after Thursday’s close. In the year-ago period the company had revenue of $6.6 million. Urologix did not release figures but said it expects a net loss in the third quarter of fiscal 2007 and will report final results on May 9, 2007, before market open. Shares lost $0.35, or 12.36%, to $2.50.
News of a buyout lifted shares of Cutter & Buck $2.54, or 21.84%, to $14.17. The Seattle-based sportswear and outerwear designer will be acquired by Swedish company New Wave Group AB for $156.5 million in cash, Cutter & Buck said after Thursday’s close. That’s a price of $14.38 per share, a 24% premium over Thursday’s closing price. Shares of Cutter & Buck reached $14.20 in intraday trading, a new 52-week high. The deal will be completed in May.
Pharmaceutical giant Merck & Co., Inc. (NYSE: MRK) helped lift the Dow after raising its profit forecast for the year due to strong demand for its products. Analyst Goldman Sachs upgraded its shares to “Neutral” from “Sell.”
American consumers lost confidence in April, the Reuters/University of Michigan's preliminary index of consumer sentiment showed after the start of trading. The index fell to 85.3 in mid-April from 88.4 in March. Economists were expecting a smaller decline to 87.5.
In other economic news, prices paid to U.S. producers rose a greater-than-expected 1% in March due to higher energy costs, the Labor Department said before the opening bell.
However, core figures, which exclude the price of fuel and food, stayed flat, easing fears of inflation and suggesting companies are absorbing higher energy costs without passing them along to consumers.
By Alex Alexandrov
