Another rally for small caps
The Russell 2000 (NYSE:IWM) posted a large increase for the second consecutive session on upbeat financial and housing news. The small-cap index advanced 19.86 points, or 2.91%, to 701.28. The Dow Jones Industrial Average (INDU) rose 187.32 points, or 1.52%, to 12,548.64.
On a year-to-date basis, the Russell 2000 has declined 8.45%, while the Dow is down 5.40% and the S&P 500 has lost 8.07%.
Stocks small and large began the day in the green on news before the start of trading that investment bank JPMorgan Chase & Co. (NYSE:JPM) has raised its offer for Bear Stearns (NYSE:BSC) to $10 a share from $2 a share. The move is in response to disgruntled employees at Bear Stearns complaining that the original bid was too low.
The bulls gained strength at 10 a.m. ET, when the National Association of Realtors reported that sales of existing homes rose 2.9% to an annual rate of 5.03 million units in February from a pace of 4.89 million in January. Economists were calling for a small decline.
The numbers suggest the housing market might be stabilizing after more than a year of declines.
Amidst the rally, shares of companies making computer storage devices were the leading industry group. Among the winners was small-cap Adaptec Inc. (Nasdaq:ADPT). England-based Xyratex Ltd. (Nasdaq:XRTX), which providers data storage solutions and storage process technology, also saw its stock price increase.
On the flip side, shares of gold and silver companies were the worst-performing industry group. Littleton, Colo.-based Vista Gold Corp. (AMEX:VGZ) saw its stock price decline 3%.
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:• Synplicity Inc. (SYNP), up 48% to $7.85 on news it will be bought by Synopsys Inc. (SNPS) for about $227 million.
• Borders Group, Inc. (BGP), up 43% to $7.25 on speculation it could be purchased by rival Barnes & Noble Inc. (BKS).
• Digimarc Corp. (DMRC), up 32% to $11.13 on news L-1 Identity Solutions Inc. (ID) will buy its ID systems business.
• PC Mall Inc. (MALL), down 25% to $10.57.
• ValueVision Media, Inc. (VVTV), down 17% to $6.00.
• Cohu Inc. (COHU), down 16% to $16.99.
• Borders Group, Inc. (BGP) 11,669,200 shares traded.
• Hovnanian Enterprises, Inc. (HOV) 8,651,400 shares traded.
• EMCORE Corp. (EMKR) 4,416,900 shares traded.
The day saw 27 small-cap stocks set 52-week lows, while 14 small caps established a 52-week high.
