Russell 2000 opens positive
The Russell 2000 (NYSE: IWM) and the other major U.S. indices are posting modest gains on news of an agreement to help struggling homeowners.
At 10:55 a.m. ET, the small-cap index had added 10.47 points, or 1.37%, to 776.11. The Dow Jones Industrial Average (INDU) had gained 39.99 points, or 0.30%, to 13,484.95.
The interest rates on some subprime mortgages will stay put for five years to help cash-strapped homeowners make their payments and avoid foreclosure, according to news reports this morning.
The details of the Bush Administration’s plan to ease the burden on homeowners have not been made public yet, but an announcement is expected soon.
That news is helping the bulls and calming investors who worry that the prolonged slump in the U.S. housing sector could lead to a sharp slowdown in economic growth or a recession.
Elsewhere, U.S. retailers posted mixed sales in November. Among the big players, Wal-Mart Stores Inc. (NYSE: WMT) reported a 1.5% increase in U.S. same-store sales, a figure towards the higher end of its previously announced expected range.
Among small-cap retailers, The Bon-Ton Stores, Inc. (Nasdaq: BONT) said that its total sales for the month increased 7.1% to $393.1 million, compared with $367 million a year earlier.
In economic news, the number of unemployment claims for the week ended Dec. 1 was 338,000, a decrease of 15,000 from the previous week’s upwardly revised figure of 353,000, according to the U.S. Labor Department. Economists were expecting to see a slightly larger decline.
The four-week moving average, a more stable measure, was 2,593,750, an increase of 6,000 from the preceding week’s revised average of 2,587,750.
The numbers tell us that the labor market is weakening somewhat.
Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• Fleetwood Enterprises, Inc. (FLE), up 36% on news of a narrower fiscal second-quarter loss.
• Methode Electronics, Inc. (MEI), up 31% on news that fiscal second-quarter profit beat expectations.
• Hoku Scientific, Inc. (HOKU), up 28% on news it will borrow up to $185 million for the construction of a polysilicon production plant.
Biggest percentage losers:
• Cantel Medical Corp. (CMN), down 10% on news of poor fiscal first-quarter results.
• Innovative Solutions and Support, Inc. (ISSC) down 10% on news of a wider fiscal fourth-quarter loss.
• Origin Agritech Ltd. (SEED), down 7%.
