Russell 2000 drops
The Russell 2000 (NYSE: IWM) and the Dow Jones Industrial Average (INDU) are in negative territory despite news of a better-than-expected October jobs report.
At 10:28 a.m. ET, the small-cap index had lost 3.69 points, or 0.46%, to 791.49. The Dow was down 51.21 points, or 0.38%, to 13,516.66.
Non-farm payrolls increased 166,000 in October, compared with a downwardly adjusted increase of 96,000 in September, the U.S. Labor Department announced before the start of trading. That’s more than double the projected rise of 80,000 and a sign that the labor market remains tight and that the U.S. economy will most likely avoid recession.
The unemployment rate is unchanged at 4.7%.
The surprisingly strong jobs report makes it less likely that the U.S. Federal Reserve will move to lower the target interest rate during the remainder of 2007.
The jobs report also showed that average hourly earnings increased $0.03, or 0.2%, to $17.58 during October. That’s a rise of 3.8% from one year ago, suggesting that the tight labor market is not fueling inflation by putting too much upward pressure on wages.
The small-cap futures were logically higher and stocks opened in positive territory.
But the bullish sentiment did not last long, with the financial sector as the catalyst for the negative change.
News released before the opening showed that financial services giant Merrill Lynch & Co. Inc. (NYSE: MER) has made deals with hedge funds to postpone when it records losses due to bets made on securities backed by subprime mortgages.
Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• RadiSys Corp. (RSYS), up 25% on news of a narrower third-quarter loss.
• Cray Inc. (CRAY), up 21% on news it swung to a third-quarter profit.
• Big 5 Sporting Goods Corp. (BGFV), up 21% on news of a rise in third-quarter profit.
Biggest percentage losers:
• Glu Mobile Inc. (GLUU), down 30% on news of a third-quarter net loss.
• Town Sports International Holdings Inc. (CLUB), down 25% on news of a decline in third-quarter profit.
• OPNET Technologies, Inc. (OPNT) down 24% on news of a decline in second-quarter net income.
