Four in a row for Russell
The Russell 2000 index and the Dow closed at new record highs despite news of a sharp drop on the Shanghai stock market and disappointing U.S. economic news. The Russell 2000 added 1.68 points, or 0.20%, to end at 855.09, its fourth consecutive record close. The Dow Jones Industrial Average also made history, gaining 8.21 points, or 0.06%, to 13,676.32, its second consecutive record.
U.S. stocks opened in the red following news the Shanghai Composite Index dropped 8.3%, its biggest decline since the 9% fall on February 27 that sent tremors throughout global financial markets.
In economic news, factory orders rose less than expected in April, the U.S. Census Bureau said after the start of trading. Orders increased 0.3%, following March’s increase of 4.1%. Economists were expecting a rise of 0.7%.
Among individual small-cap companies:
Shares of Life Partners Holdings, Inc. (Nasdaq: LPHI) ended the day among the winners on news the life settlement company expects to blow away Wall Street’s first-quarter earnings expectations. The net income for the quarter ended May 31 is projected at $0.49 per share, compared with earnings of $0.05 per share for the same period last year, Waco, Texas-based Life Partners said after the start of trading. Analysts were looking for earnings of $0.11 per share. CEO Brian Pardo said he attributes the strong demand to senior citizens turning their unwanted life insurance into cash. Shares added $5.42, or 29%, to close at $23.80.
Seattle-based computer company Cray Inc. (Nasdaq: CRAY) may not post a profit for the 2007 year due to revenue delays associated with quad-core Cray XT4, on of its key products. “Two of our most important goals have been to grow and achieve profitability, both of which are now in jeopardy for 2007,” CEO Peter Ungaro said before the opening bell. The company reported that total yearly revenue will most likely be at or below $200 million, whereas four analysts surveyed by Thomson Financial were expecting revenues of $226.1 million. The stock lost $0.75, or 9%, to settle at $7.20.
Sonesta International Hotels Corp. (Nasdaq: SNSTA) shares surged after the company announced it’s exploring strategic alternatives to improve shareholder value. The Boston, Mass.-based hotel operator said that it is not looking for a specific outcome and will make no public statements concerning the announcement unless the strategic review results in a transaction. Shares moved up $7.74, or 33%, to $30.99.
