Russell 2000 drops as Dow claims record
The Russell 2000 lost nearly a full percentage point while the Dow set a new record as investors reacted to news of mild U.S. inflation in April. In small cap action, shares of LanOptics Ltd. (Nasdaq: LNOP) fell on news of a quarterly loss, while InPhonic, Inc. (Nasdaq: INPC) dropped on an announcement that it’s facing a new class action lawsuit.
The Russell 2000 lost 8.15 points, or 0.99%, to 814.18. That’s 20.59 below its record close of 834.77, achieved on May 9. The Dow Jones Industrial Average added 37.06 points, or 0.28%, to a new record close of 13,383.84.
Shares InPhonic, Inc., an online seller of wireless services, ended the day in the red following news the Washington D.C.-based company is being sued. Before the start of trading, the law offices of Brodsky & Smith, LLC announced that a class action lawsuit has been filed on behalf of the shareholders, alleging that InPhonic issued a series of material misrepresentations that inflated its stock price. That’s the third class action lawsuit launched against InPhonic in less than a week. The stock fell $0.18, or 2%, to $7.66.
Professional services firm Versar, Inc. (AMEX: VSR) has been awarded $20.3 million in delivery orders to provide professional management services for approximately 360 personnel involved in construction management for the Army's reconstruction efforts in Iraq. That’s a nearly 50% increase of the original contract, the Springfield, Va.-based company said before the opening bell. The work is expected to be completed by April 2008. Shares are up $0.18, or 3%, to $7.00.
Shares of LanOptics Ltd. fell $1.16, or 7%, to close at $14.82, on news the Israeli network processor provider lost money in the first quarter of 2007. The net loss for the three months ended March 31 was $1.1 million, or $0.07 per share, compared with a net loss of $5.1 million, or $0.42 per share, in the first three months of 2006, the company said before the market open. Analyst estimates were not available. However, LanOptics also reported record revenues of $3.9 million, 172% more than the $1.4 million it brought in a year earlier.
The dominant economic news of the day was the U.S. Labor Department’s report on the consumer price index for April.
Consumer prices rose 0.4% in April, below economists’ expected increase of 0.5% and less then the 0.6% gain in March.
Core inflation, which excludes the costs of food and energy, gained 0.2%, was in line with expectations. Core prices added 0.1% in March.
The figures show that slow economic growth is keeping inflation in check, making it less likely that the Federal Reserve will move to raise interest rates.
