Higher opening for Russell 2000
The Russell 2000 (NYSE: IWM) and the other major U.S. indices are higher this morning as news of strong earnings overshadows unimpressive economic data.
At 10:42 a.m. ET, the small-cap index had added 4.32 points, or 0.52%, to 827.67. The Dow Jones Industrial Average (INDU) was up 24.31 points, or 0.17%, to 13,937.25.
The first bullish earnings news came out after the close on Tuesday when search engine Yahoo! Inc. (Nasdaq: YHOO) reported third-quarter profit that outpaced Wall Street’s projections. The Sunnyvale, Calif.-based company said that net income slipped to $151.3 million, or $0.11 per share, compared with $158.5 million, or $0.11 per share a year earlier. However, analysts were forecasting earnings of $0.08 per share.
The trend of tech sector heavyweights beating earnings projections continued today with Intel Corp. (Nasdaq: INTC) and United Technologies Corp. (NYSE: UTX) also announcing better-than-expected quarterly financials.
Futures were up and small and big caps were poised for even bigger gains when news that the U.S. housing sector continues to agonize pulled the bulls back.
The U.S. Census Bureau reported before the opening that housing starts for the month of September fell to their lowest annualized pace in 14 years.
Builders broke ground on 1.191 million privately owned housing units at an annual rate, falling short of the 1.285 million units expected by economists. Housing starts were down 10.2% from an upwardly revised 1.327 million in August.
Housing starts were down 30.8% compared to the level in September 2006.
Building permits, an indicator of future construction plans, fell 7.2% to an annual pace of 1.226 million, from 1.322 million in August.
In other economic news, the U.S. Labor Department reported that the consumer price index, the main measure of inflation, grew 0.3% in September, following a fall of 0.1% in August. Economists were expecting a slightly lower reading of 0.2%.
Core inflation, which excludes the cost of food and energy, was 0.2%, in line with economists’ forecast.
Investors will also be awaiting the release of the U.S. Federal Reserve’s beige book, a report of regional economic conditions, which is scheduled for 2 p.m. ET.
Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• China Techfaith Wireless Communication Technology Ltd. (CNTF), up 30% on news of a contract with the Chinese government.
• Fuel Tech Inc. (FTEK), up 15% on news of a $7.2 million contract.
• Cardica Inc. (CRDC), up 10%.
Biggest percentage losers:
• Renaissance Learning Inc. (RLRN), down 11% on news of a lower third-quarter profit.
• ACA Capital Holdings Inc. (ACA), down 10%.
• The Bon-Ton Stores, Inc. (BONT) down 8% on news of a lower fiscal 2007 guidance.
