Just shy of a record
April 16 (SmallCapInvestor.com) –The Russell 2000 index is close to its record high in midday trading today, as stocks are boosted by news of strong results in the financial sector and a drop in the price of oil. Fremont General Corporation (NYSE: FMT) is up following news it will sell $2.9 billion worth of loans, while shares of Streamline Health Solutions Inc. (Nasdaq: STRM) secured a new client, lifting its stock price.
At 1:41 PM the Russell 2000 had added 9.46 points, or 1.15 percent, to 828.84, within reach of its record close of 829.44. The Dow Jones Industrial Average was up 99.79 points, or 0.79 percent, to 12,711.92.
Shares of Fremont General Corporation are up on news the Santa Monica, Calif.-based subprime lender signed a letter of intent to sell its residential real estate business. The unnamed buyer will buy $2.9 billion worth of loans, which is the majority of Fremont's subprime residential real estate loans, Fremont General said before the start of trading. The company estimates that the sale of these loans will result in a pre-tax loss on sale of approximately $100 million. Shares are up $1.89, or 26.81%, to $8.94.
Powell Industries, Inc. (Nasdaq: POWL) lowered its stock price after reporting it found accounting errors in previously issued consolidated financial statements for the quarter ended Dec. 31, 2006 and for the eleven-month transition period ended Sep. 30, 2006, as well as one or more fiscal quarters during the transition period. The errors were discovered in the course of a review of the financial results by a new controller, Houston-based Powell Industries said after Friday’s close. Shares are down $4.52, or 12.22%, to $32.47.
Shares of Cincinnati, Ohio-based healthcare information technology company Streamline Health Solutions are up $0.63, or 14.75%, to $4.90. A new client from a hospital center in the northeastern region of the United States will implement the company’s enterprise document workflow solutions, integrated with the hospital's current clinical information systems, Streamline said before the opening bell. The new client is one of the largest voluntary, not-for-profit health care systems in the Northeast, with two major hospital divisions.
Revenue at Citigroup, the largest financial institution in the country, has increased 15%. Citigroup, the nation's largest financial institution, reported a 15% rise in revenue. Citi also said its first-quarter profit fell 11% due to costs associated with the plan announced last week to eliminate 17,000 jobs in order to reign in expenses.
The price of oil is in the low $63 a barrel range after traders said oil producer Nigeria might be able to recover some of the output that had been shut down by militant attacks last year.
