A good day for small caps
The Russell 2000 (NYSE: IWM) and the other major indices posted solid gains today on news that Citigroup Inc. (NYSE: C) received a cash injection of $7.5 billion. The small-cap index added 8.20 points, or 1.12%, to 743.27. The Dow Jones Industrial Average (INDU) rose 215 points, or 1.69%, to 12,958.44.
On a year-to-date basis, the Russell 2000 has shed 5.61%, while the Dow has added 3.88% and the S&P 500 has advanced 0.82%.
The futures were pointing up and stocks climbed out of the gate on news after the close on Monday that the Abu Dhabi Investment Authority has purchased a 4.9% stake in the largest U.S. bank for $7.5 billion.
The cash will help New York-based Citigroup better deal with billions of dollars in losses due to the purchase of securities backed by subprime mortgages. News came out on Monday that Citi, which suffered a loss in the third quarter, may have to slash as many as 45,000 workers from its payroll in an effort to return to profitability.
Today the bank was a bullish force on Wall Street, even though some analysts suggested that Citi may still need to raise more capital.
Stocks were rising steadily until 10 a.m. ET, when the Conference Board reported a larger-than-expected drop in consumer confidence for November.
The business organization said that its index of consumer confidence fell to 87.3 from a downwardly revised level of 95.2 in October. That’s the lowest reading since the aftermath of Hurricane Katrina in October 2005 and a sign that Americans are getting more tightfisted in the face of higher energy costs and declining home prices.
Speaking of the slump in the U.S. housing sector, the Standard & Poor’s Case-Shiller housing index showed that home prices fell 4.5% in the third quarter from a year earlier. That’s the steepest decline since the index was introduced in 1987 and an indicator that the housing downturn has deepened. The index has been falling since the second quarter of 2006.
“There is no real positive news in today’s data,” said Robert J. Shiller, chief economist at MacroMarkets LLC, in a statement.
Tampa is the metro area with the largest annual decline, followed by Miami, Detroit and San Diego.
Stocks lost their momentum and started heading down, with the Russell 2000 even going below the flat line for a few minutes at about 10:15 a.m. ET. But the bulls returned and dominated the rest of the session.
Here are the day’s biggest percentage gainers and losers, along with top volume leaders, among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• WCA Waste Corp. (WCAA), up 26% to $7.12. A company representative could not be reached for comment.
• Chesapeake Corp. (CSK), up 20% to $7.03. A company representative could not be reached for comment.
• Security Capital Assurance Ltd. (SCA), up 20% to $5.32 following news after Monday’s close that a member of the board left.
Biggest percentage losers:
• BIDZ.com, Inc. (BIDZ), down 28% to $11.88 on news it reaffirmed its previous guidance for fiscal 2007 and fiscal 2008.
• Genesco Inc. (GCO), down 16% to $25.44 on news it has received a subpoena from a U.S. Attorney for documents related to its pending acquisition by The Finish Line Inc. (FINL).
• China Finance Online Co. Ltd. (JRJC), down 12% to $16.99. The company could not be reached for comment.
Volume leaders:
• BIDZ.com, Inc. (BIDZ) 12,197,300 shares traded.
• ANADIGICS Inc. (ANAD) 4,756,700 shares traded on news it has selected a distributor for its discontinued products.
• Palm Inc. (PALM) 4,670,000 shares traded.
The day saw 107 small-cap stocks set 52-week lows, while seven small caps established 52-week highs.
