Modest rise ahead of holiday
The Russell 2000 and the other major U.S. indices posted gains ahead of the Independence Day holiday following news of a smaller-than-expected drop in May factory orders. The Russell 2000 moved up 3.14 points, or 0.37%, to finish at 848.20. The Dow Jones Industrial Average added 41.87 points, or 0.31%, to 13,577.30.
Stocks were trending up all day, no doubt helped by news that May U.S. factory orders decreased a less than expected 0.5%, according to the Commerce Department.
Economists were expecting factory orders to drop 1.2% drop in May after rising 0.5% in April.
The decline was primarily due to a 6.9% drop in transportation orders. The transportation sector is the largest component of factory orders. Factory orders were up 0.7% excluding transportation.
Investors appeared indifferent to a report by the National Association of Realtors that said the index of pending home sales fell 3.5% in May. That’s the lowest level since September 2001, defying projections of a small rise.
Elsewhere, the price of oil added about $0.15 to stay above $71 a barrel.
Among specific small-cap companies:
Shares of Simulations Plus, Inc. (AMEX: SLP) appreciated following news the maker of pharmaceutical simulation software reported a fiscal third quarter profit that beat expectations. The net income for the quarter ended May 31 was $0.78 million, or $0.10 per share, compared with a net income of $0.39 million, or $0.05 per share, during the same three months of fiscal 2006, the Lancaster, Calif.-based company reported before the opening bell. One analyst polled by Thomson Financial was expecting earnings of $0.07 per share. CEO Walt Woltosz said that Simulation Plus is debt-free and actively looking for acquisition targets. Shares added $1.30, or 13%, to end the day at $11.30.
Irvine, Calif.-based Netlist Inc. (Nasdaq: NLST) saw its stock price drop $0.99, or 28%, to $2.61, on news the manufacturer of high-performance memory subsystems lowered its second-quarter earnings forecast. The net loss for the quarter ended June 30 will be between $0.35 per share and $0.37 per share, the company said after Monday’s close. Wall Street was looking for Netlist to break even. Netlist had previously projected that it would break even or post a small profit of $0.02 per share. CEO Chuck Hong said the decline was partially attributable to lower shipments on certain qualified products, but added that the company is cutting expenses and is close to completing a new facility in China.
Owners of RiT Technologies Ltd.’s (Nasdaq: RITT) stock will be extra happy this July 4 on news that the Israeli provider of network physical infrastructure management solutions has received a large order from China. An unnamed Chinese corporation has ordered and received an infrastructure solution that will help it manage tens of thousands of ports at its new headquarters building, RiT said before market open. Installation will be completed in the third quarter of 2007. The order brings the company’s China sales to more than $1 million less than a year after it opened an office in the booming Asian country. Shares rose $0.19, or 14%, to close at $1.51.
