Economic data lifts Russell 2000
The Russell 2000 (NYSE: IWM) and the Dow snapped a two-day losing streak to post solid gains on news of positive economic reports. The small-cap index added 13.58 points, or 1.81%, to 765.64. The Dow Jones Industrial Average (INDU) climbed 196.23 points, or 1.48%, to 13,444.96.
On a year-to-date basis, the Russell 2000 has lost 2.77%, while the Dow has gained 7.78% and the S&P 500 has advanced 4.83%.
The bulls owned the session today following news of a greater-than-expected rise in third-quarter U.S. productivity.
The Labor Department reported that non-farm U.S. productivity increased at an annualized rate of 6.3% during the third quarter, which is above the initially reported increase of 4.9% and the largest productivity gain in four years. Economists were expecting to see a narrower increase. Productivity rose 2.2% during the second quarter.
The same report also showed that unit labor costs, the cost of worker compensation and benefits per unit of manufactured output, declined 2%.
Unit labor costs are a key measure of inflation because if a rise in labor costs is not matched by a rise in productivity, the company must either absorb the increased costs or pass them along to the consumer in the form of higher prices.
The numbers suggest that the widely expected slowdown in economic growth, which some have suggested could turn into a recession, might not be as severe as believed.
But there will be a slowdown, as confirmed by data from the Institute for Supply Management, which announced that non-manufacturing sector business activity fell to 54.1 from 55.8 in November. Economists had forecasted the index at 55.
Elsewhere, Roseland, N.J.-based business solutions provider Automatic Data Processing, Inc. (NYSE: ADP) reported that U.S. private-sector jobs increased 189,000 in November, well above the 60,000 projected by economists.
That tells us that the labor market remains strong. The gains came from the service sector, with manufacturing and goods-producing jobs posting slim declines.
Investors will be waiting for the November employment statistics the Labor Department will release on Friday.
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:
• China Natural Resources Inc. (CHNR), up 88% to $31.50. A company representative could not be reached for comment.
• China Precision Steel, Inc. (CPSL), up 38% to $7.10 on news of a rise in first-quarter earnings.
• China Shenghuo Pharmaceutical Holdings, Inc. (KUN), up 27% to $7.50. A company representative could not be reached for comment.
Biggest percentage losers:
• Clean Diesel Technologies, Inc. (CDTI), down 15% to $22. A company representative was not available for comment.
• Agria Corp. (GRO), down 15% to $10.06 on news of a decline in third-quarter profit.
• Clean Energy Fuels Corp. (CLNE), down 13% to 12.76. A company representative could not be reached for comment.
Volume leaders:
• China Precision Steel, Inc. (CPSL) 9,160,400 shares traded.
• Canadian Solar Inc. (CSIQ) 5,411,400 shares traded on news it has priced an offering of $75 million of convertible senior unsecured notes due 2017 at $19.76 per share.
• China Sunergy Co., Ltd. (CSUN) 5,050,700 shares traded.
The day saw 44 small-cap stocks set 52-week lows, while six small caps established 52-week highs.
