Russell 2000 leads bear parade
The Russell 2000 is lower than the other indices on news of weak earnings from major players and negative developments in the subprime financial sector. At 11:52 a.m. ET the Russell 2000 was down 7.25 points, or 0.85%, to 845.99. The Dow Jones Industrial Average was down 35.77 points, or 0.26%, to 13,614.20.
Shares of Carrier Access Corp. (Nasdaq: CACS), which makes converged access equipment to wireline and wireless carriers, are in negative territory on news of a larger-than-expected forecast quarterly net loss. The net loss for the second quarter ended June 30 is projected at between $0.28 per share and $0.31 per share, the Boulder, Colo.-based company announced after Monday’s close. Seven analysts surveyed by Thomson Financial were looking for a net loss of $0.27 per share. Carrier Access also said that is streamlining its wireless and converged access businesses. Shares are down $0.58, or 12%, to $4.45.
Bothell, Wash.-based SonoSite Inc. (Nasdaq: SONO) will offer $150 million aggregate principal amount of Convertible Senior Notes due 2014, the maker of medical hand-carried ultrasound systems said after Monday’s close. The company intends to use the proceeds to fund possible future acquisitions and for general corporate purposes. The stock is down $1.86, or 5%, to $32.73.
Shares of Ultralife Batteries, Inc. (Nasdaq: ULBI) are recharging, up $0.30, or 3%, to $11.25 following news of a $2 million order. Before the opening bell the Newark, N.Y.-based company reported that it has received an order from the Australian Department of Defense to supply lithium-sulfur dioxide batteries. Deliveries will be completed in the fourth quarter.
In financial news, rating agency Standard & Poor’s may reduce the credit ratings of $12 billion of bonds backed by subprime mortgages, the New York-based company said this morning. That could make things even worse for hedge funds and securities firms that had placed bets on subprime mortages.
Some investors are obligated to sell their bonds following a downgrade.
S&P attributed the potential downgrade to weakness in the U.S. housing market, which it does not think will improve in the near term.
In economic news, investors are anxiously awaiting a speech by U.S. Federal Reserve Chairman Ben Bernanke this afternoon for clues on inflation and the direction of interest rates.
Atlanta-based home improvement retailer Home Depot Inc. (NYSE: HD) announced this morning that its earnings for the year will fall more the previously forecast due to weakness in the U.S. housing sector, while Sears Holdings Corp. (Nasdaq: SHLD) reported this a decline in same store sales for the nine-week period ended July 7.
