Russell 2000 and Dow go lower
The Russell 2000 (NYSE: IWM) is deep in negative territory while the Dow Jones Industrial Average (INDU) is marginally lower following news of a surprise drop in industrial production.
At 10:41 a.m. ET, the small-cap index was down 9.68 points, or 1.25%, to 761.92. The Dow is down 16.02 points, or 0.12%, to 13,094.03.
Industrial production surprisingly fell 0.5% in October, the U.S. Federal Reserve reported minutes before the opening. That’s the biggest decline since January. Economists were expecting a rise of 0.1% after industrial production added 0.2% in September.
The decline was due primarily to a 1.6% drop in utilities, while mines fell 0.6% and construction slipped 0.4%.
Capacity utilization for the total industry declined to 81.7% from 82.2% in September.
The numbers tell us that the U.S. economy is probably headed for a slowdown, as industrial production is about 20% of gross domestic product. But the on the other hand, factories have plenty of room to ramp up production without triggering inflation.
In corporate news, there was a bullish mood before the start of trading on news that analysts have raised their recommendations on computer hardware maker Hewlett-Packard Co. (Nasdaq: HPQ) and energy giant Chevron Corp. (NYSE: CVX).
Also contributing good news was Cisco Systems Inc. (Nasdaq: CSCO), after the Internet communications company authorized additional stock repurchases valued at as much as $10 billion, raising the total amount to $62 billion.
Stocks started in positive territory but small caps tumbled down soon afterward, while the Dow held on for longer before trimming some of its gains and eventually also slipping into the red.
Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• Coley Pharmaceutical Group, Inc. (COLY) up 159% on news that it will be bought by Pfizer Inc. (PFE) for $164 million.
• Global Cash Access Holdings Inc. (GCA), up 36% despite news of an analyst downgrade.
• Innospec Inc. (IOSP), up 14% on news of an analyst upgrade.
Biggest percentage losers:
• Acacia Research-Acacia Technologies (ACTG), down 34% on news of a negative ruling in a patent infringement trial with Microsoft Corp. (MSFT).
• The9 Limited (NCTY), down 26% on news of an analyst downgrade and a decline in third-quarter net income.
• Superior Offshore International, Inc. (DEEP) down 19% on news that third-quarter profit misses Wall Street’s expectations.
