Housing data lifts Russell 2000
The Russell 2000 (NYSE: IWM) is in the green as news of a surprisingly bullish housing report offset generally negative economic reports.
At 10:42 a.m. ET, the small-cap index had gained 2.41 points, or 0.30%, to 813.26. The Dow Jones Industrial Average (INDU) had added 16.67 points, or 0.12%, to 13,691.92.
The small-cap futures were higher before the opening on news that Motorola Inc. (NYSE: MOT) reported its first profit in 2007. The Schaumburg, Ill.-based telecommunications giant also announced a better-than-expected outlook for the fourth quarter.
In economic news, orders for durable goods, which are intended to last at least three years, fell 1.7% in September, according to the U.S. Commerce Department. Economists were expecting a rise of 1.5% following a downwardly revised decline of 5.3% in August.
On the plus side, orders for non-defense capital goods excluding aircraft increased 0.4% after a rise of 1.8% in August. That measure is a key barometer of business spending and today’s reading is a sign that businesses are continuing to spend money on capital equipment despite the uncertain U.S. economic environment.
Elsewhere, the number of U.S. workers applying for jobless benefits fell less than expected for the week ended Oct. 20, the U.S. Labor Department said before the start of trading. Unemployment claims declined 8,000 to 331,000, while economists were calling for a much larger drop of 17,000.
The Russell 2000 cautiously opened slightly higher but quickly slipped below the flat line, weighed down by the bearish economic news.
The big surprise this morning came half an hour after the start of trading, when the U.S. Census Bureau announced that sales of new homes increased a healthy 4.8%, an annual rate of 770,000 in September. Economists were expecting to see a decline.
Stocks started climbing immediately, rapidly moving into positive territory.
Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• Mercury Computer Systems Inc. (MRCY), up 25% on news of a narrower first-quarter loss.
• Transcend Services Inc. (TRCR), up 19% on news of improved third-quarter results.
• iRobot Corp. (IRBT), up 15% on news of a higher 2007 revenue guidance.
Biggest percentage losers:
• Sturm, Ruger & Company Inc. (RGR), down 41% on news of poor third-quarter results.
• Triad Guaranty Inc. (TGIC), down 27% on news of a third-quarter loss.
• Barrett Business Services Inc. (BBSI), down 16% on news that fourth-quarter earnings guidance missed Wall Street’s projections.
