Russell 2000 slips
The Russell 2000 (NYSE: IWM) and the Dow Jones Industrial Average (INDU) are losing ground after the University of Michigan’s Surveys of Consumers hit its lowest level since 1992. December sentiment hit 74.5, below last month’s 76.1. Wall Street economists had predicted December sentiment to hit 75.0.
The Labor Department’s jobs report for November contributed to positive news. For the month of November, non-farm payrolls grew by a better-than-expected 94,000 fueled by growth in the areas of professional and technical services, health-care and food services, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Economists were projecting jobs to grow by 70,000 from 166,000 jobs created in the month of October. Employment continues to languish in manufacturing and in several housing-related industries, including construction, credit intermediation and real estate.
The unemployment rate held at 4.7% percent, while the average hourly earnings rose by $0.08 over the month, the Labor Department reported as well.
At 10:46 a.m. ET, the small-cap index dropped 3 points, or 0.83%, to 783.95. The Dow dropped 10.48 points, or 0.08%, to 13,609.41.
Separately, investors brushed off downgrades by Merrill Lynch & Co., Inc. (NYSE: MER) to "sell" from "neutral" on American Express Company (NYSE: AXP), Capital One Financial Corp. (NYSE: COF) and Discover Financial Services (NYSE: DFS), noting that “deterioration in consumer credit and spending will continue to undermine the fundamentals of each and lead to share price declines.”
Morgan Stanley (NYSE: MS) also cut its rating on Capital One to "underweight" from "overweight," stating that the U.S. consumer finance industry will encounter a worse-than-projected cycle than markets have accounted for.
Biggest percentage gainers:
• IMAX Corp. (Nasdaq: IMAX) up 64.9% on news of a 100-theater deal with AMC Entertainment, Inc.
• Liquidity Services, Inc. (Nasdaq: LQDT), up 29.8% after the online auctioneer reported that fourth quarter net income was up 347% from a year earlier.
• Carolina Trust Bank (Nasdaq: CART), up 25.8%.
Biggest percentage losers:
• Smith & Wesson Holding Corp. (Nasdaq: SWHC), down 28.8% after the gun maker cut its fiscal 2008 profit forecast.
• Palm, Inc. (Nasdaq: PALM), down 18.1% after the maker of computer devices said late Thursday that a shipping delay for one of its products, as well as "unforeseen" warranty repairs, would push the company into a net loss for its latest quarter.
• Exar Corp. (Nasdaq: EXAR), down 13.4% after the developer and designer of wide area networks said its CEO resigned.
