Only Russell 2000 moves up
The Russell 2000 (NYSE: IWM) was the only major U.S. index to gain today as investors digested economic news. The small-cap index added 2.48 points, or 0.36%, to 699.91. The Dow Jones Industrial Average (INDU) fell 34.95 points, or 0.28%, to 12,466.16.
On a year-to-date basis, the Russell 2000 is down 8.63%, while the Dow has retreated 6.02% and the S&P 500 has trimmed 6.48%.
Small-cap stocks made sharp moves in both directions but spent the second half of trading in positive territory and managed to close with a small gain despite a late-session sell-off.
The day began with news of a report from the U.S. Labor Department that consumer prices rose 0.3% in December. That’s above economists’ projected increase of 0.2% but below November’s 0.8% jump.
That means that total inflation in 2007 inflation was 4.1%, the highest rate since 1990.
However, December core inflation, which excludes food and energy, was 0.2%, following an increase of 0.3% in November.
Core inflation for all of 2007 was 2.4%, which is slightly above the U.S. Federal Reserve’s preferred range between 1% and 2%.
Speaking of the Fed, the U.S. central bank reported today that economic activity grew at a slower pace during the mid-November though December period. The “beige book” survey of regional economic conditions showed that seven of the Fed’s twelve districts reported a rise in economic activity, while three posted declines.
“Most reports on retail activity indicated subdued holiday spending and further weakness in auto sales,” the report said. Additionally, banks and other financial institutions saw declines in residential real estate lending as housing remained weak in all districts.
On the plus side, the flow of tourists from Europe and Canada was “especially strong,” presumably as foreigners took advantage of the weak dollar to visit the United States and do some shopping.
The Fed will be making headlines on Thursday as chairman Ben Bernanke heads to Capitol Hill to testify before Congress. Politicians from both sides of the aisle have been calling for some sort of policy response to avoid a possible recession.
In corporate news, JPMorgan Chase & Co. (NYSE: JPM) announced that fourth-quarter net income declined 21% to below analysts’ expectations as the banking giant suffered $1.3 billion in writedowns due to bets made on securities backed by subprime mortgage loans.
But the New York-based company saw its shares rise almost 6% as the bulls reacted to news that it posted fourth-quarter revenue above Wall Street’s projections.
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:
• Tuesday Morning Corp. (TUES), up 19% to $5.18.
• VistaCare, Inc. (VSTA), up 18% to $8.30 on news it will be acquired by Odyssey HealthCare Inc. (ODSY) for about $147.1 million.
• TICC Capital Corp. (TICC), up 18% to $10.01.
Biggest percentage losers:
• Stereotaxis, Inc. (STXS), down 22% to $8.84 on news of fourth-quarter guidance below expectations.
• PFF Bancorp, Inc. (PFB), down 21% to $8.15 on news that it expects a provision for loan and lease losses in the third quarter.
• California Pizza Kitchen, Inc. (CPKI), down 18% to $10.10 on news it has lowered its fourth-quarter guidance.
Volume leaders:
• VistaCare, Inc. (VSTA) 8,167,400 shares traded.
• MoneyGram International, Inc. (MGI) 7,757,200 shares traded on news on Tuesday that it has sold a piece of itself to an investment fund.
• IndyMac Bancorp, Inc. (IMB) 5,598,300 shares traded on news that it is reducing its workforce by 24%.
The day saw 99 small-cap stocks set 52-week lows, while five small caps established a 52-week high.
