Russell 2000 looks up
The Russell 2000 index is gaining ground along with the other major indices on news of a smaller-than-expected rise in U.S. inflation. Among specific small cap companies, shares of Astea International Inc. (Nasdaq: ATEA) skyrocketed on news of a positive first quarter, while poor financial results hurt shares of Sutron Corp. (Nasdaq: STRN).
At 11:15 a.m. ET the Russell 2000 had gained 1.06 points, or 0.13%, to 829.39. The Dow Jones Industrial Average was up 81.18 points, or 0.61%, to 13,427.96.
Shares of Sutron Corp. are trading in the negative on news the Sterling, Va.-based provider of hydrological, meteorological and oceanic monitoring products reported poor first-quarter financial results. The net income for the three months ended March 31 was just $38,972, or $0.01 per share, compared with a net income of $0.36 million, or $0.08 per share, a year earlier, the company announced before the opening bell. CEO Raul McQuivey said Sutron anticipated receiving several international contracts early in the first quarter that never materialized, which would have significantly improved results. Analyst estimates were unavailable. Shares are down $0.72, or 9%, to $7.15.
Shares of software provider Astea International Inc. are flying high, up $3.13, or 56%, to $8.75, following news the Horsham, Pa.-based company was profitable in the first-quarter. The net income was $1.3 million, or $0.36 per share, compared with a net loss of $2.3 million, or $0.64 per share, during the first three months of 2006, Astea said before the start of trading. Revenues were $7.8 million, a rise of 105% compared with revenues of $3.8 million a year earlier. Analyst estimates were not available.
Chinese wireless communications solutions provider Telestone Technologies Corp. (Nasdaq: TSTC) reported before the opening bell that its quarterly profit narrowed. The net income for the period ended March 31 was $0.45 million, or $0.05 per share, compared with a net income of $0.72 million, or $0.08 per share, in the first quarter of 2006. That’s a decline of 37.5%, which Telestone Technologies blamed on increased marketing expenses. Analyst estimates were not available. Shares are down $1.56, or 20%, to $6.20.
U.S. consumer prices rose 0.4% in April, falling short of economists’ expected rise of 0.5%. The U.S. Labor Department also reported that core inflation, which excludes the costs of food and energy, gained 0.2%, was in line with expectations.
The consumer price index has increased 2.6% in the past 12 months, while core prices have added 2.3%.
The data show that inflation is tame as economic growth remains slow. Investors see the easing of inflation as a sign that the U.S. Federal Reserve won’t move to raise interest rates any time soon.
