Russell 2000 falls as inflation jumps
The Russell 2000 (NYSE: IWM) is posting losses on news that U.S. consumer prices rose more than expected in November.
At 10:47 a.m. ET, the small-cap index had dropped 4.08 points, or 0.53%, to 765.38. The Dow Jones Industrial Average (INDU) was off 50.56 points, or 0.37%, to 13,467.40.
High energy costs led to a jump in inflation in November, according to a report by the U.S. Labor Department before the start of trading.
The consumer price index increased 0.8% in November, above economists’ projected rise of 0.6%. That’s the biggest increase in over two years. Prices increased across the board, with energy leading the way with a 5.7% climb.
Consumer prices added 0.3% in October. Prices are up 4.3% from November 2006.
The core consumer price index, which factors out the cost of food and energy, gained 0.3%. The forecast called for an increase of 0.2%.
Core prices are up 2.3% from November 2006, while the U.S. Federal Reserve has said that it prefers core inflation to stay in the 1% to 2% range.
The numbers suggest the Fed may have difficulty juggling the responsibility of keeping the economy growing while simultaneously keeping inflation in check — its top priority.
Elsewhere, the Fed said that industrial production increased in November while the figures for the previous three months were revised down.
Production added 0.3% and now stands 2.1% above its year-earlier level. Production of business equipment and materials increased while consumer goods declined.
Capacity utilization of U.S. industries rose to 81.5% from a downwardly revised 81.4% in October.
Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• Force Protection, Inc. (FRPT), up 28% on news the CEO has denied rumors the company is too dependent on one customer.
• China Sunergy Co., Ltd. (CSUN), up 18% on news of an agreement to supply solar cells.
• Fuel Tech, Inc. (FTEK), up 11% on news that the company chairman purchased 50,000 shares on Thursday.
Biggest percentage losers:
• QC Holdings, Inc. (QCCO), down 26%. A company representative could not be reached for comment.
• Retail Ventures, Inc. (RVI) down 21% on news that third-quarter sales were flat.
• Georgia Gulf Corp. (GGC), down 11%. Analysts said that chemical commodities stocks are under pressure due to the downturn in the U.S. housing sector and the uncertain 2008 economic outlook.
