Russell 2000 jumps on earning news
The Russell 2000 (NYSE: IWM) is the top performer as the major U.S. indices rise on news of upbeat earnings.
At 10:25 a.m. ET, the small-cap index had gained 9.11 points, or 1.13%, to 815.22. The Dow Jones Industrial Average (INDU) was up 94.78 points, or 0.69%, to 13,766.70.
The small-cap futures were pointing north following news that Microsoft Corp. (Nasdaq: MSFT) reported after Thursday’s close that its first-quarter earnings beat analysts’ expectations, mainly due to strong sales of the videogame “Halo.” The Redmond, Wash.-based also raised its outlook for the full fiscal year.
Contributing to the upbeat sentiment is Countrywide Financial Corp. (NYSE: CFC), the largest mortgage lender in the United States, which announced that it will return to profitability in the fourth quarter and beat Wall Street’s expectations. The New York-based company also reported a third-quarter net loss, its first in a quarter century, due to the meltdown in the subprime mortgage sector this summer.
Among small-cap companies, Callidus Software Inc. (Nasdaq: CALD) has been left behind after reporting a wider-than-expected third-quarter net loss.
In economic news, U.S. consumer confidence tumbled more-than-expected. The Reuters/University of Michigan final sentiment index fell in October to a reading of 80.9, the lowest level in more than a year. Economists were expecting to see a decline to a level of 82. The index was at 83.4 in September.
The drop reflects ongoing recession in the housing sector, which is sapping Americans’ willingness to spend money.
Overseas, the major Asian and European exchanges posted gains, with Japan’s Nikkei 225 adding 1.36%, while the United Kingdom’s FTSE 100 index moved up a modest 0.2%.
Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• Triad Guaranty Inc. (TGIC), up 16%.
• Graham Corp. (GHM), up 14% on news that second-quarter profit beat Wall Street’s forecast.
• Mercury Computer Systems Inc. (MRCY), up 13%.
Biggest percentage losers:
• Trident Microsystems Inc. (TRID), down 40% on news that quarterly financial results missed expectations.
• BankAtlantic Bancorp Inc. (BBX), down 44% on news of a third-quarter loss.
• Online Resources Corp. (ORCC), down 29% on news of fourth-quarter guidance below projections.
