Russell 2000 stays lower
The Russell 2000 (NYSE: IWM) is in the red as positive news from the tech sector lifts the Dow Jones Industrial Average (INDU) but fails to impress small-cap investors. At 1:52 p.m. ET, the small-cap index had shed 2.42 points, or 0.31%, to 769.18. The Dow Jones was up 63.89 points, or 0.49%, to 13,173.94.
The mood in pre-market trading was bullish following news that analysts have raised their recommendations for Hewlett-Packard Co. (Nasdaq: HPQ), the world’s largest maker of personal computers, and energy giant Chevron Corp. (NYSE: CVX).
Also contributing good news was tech sector heavyweight Cisco Systems Inc. (Nasdaq: CSCO), a maker of networking equipment, which announced that it has authorized additional stock repurchases valued at as much as $10 billion, raising the total amount to $62 billion.
Stocks started in positive territory but small caps tumbled down soon afterward, while the Dow held on for longer before trimming some of its gains and eventually also slipping into the red.
The bears’ return was facilitated by news that U.S. industrial production surprisingly fell 0.5% in October, the most since January, according to data released by the U.S. Federal Reserve before the opening. Industrial production added 0.2% in September.
The data confirm economists’ projections that U.S. economic growth is shifting into lower gear. Industrial production is about 20% of gross domestic product.
But the bulls managed to regain their footing and the major indices, with the exception of the Russell 2000, started climbing and moved into the green at about 11 a.m. ET.
In other economic news, William Poole, president of the U.S. Federal Reserve’s St. Louis regional branch, said that the Fed will probably refrain from future cuts in its target interest rate for the remainder of 2007 unless the economy slows more sharply than expected, according to a Dow Jones interview released today.
On Oct. 31, the Fed decided to lower the federal funds rate, the rate at which commercial banks make overnight loans to each other, to 4.5% from 4.75% in order to boost economic growth and ease the credit squeeze.
Elsewhere, the price of oil has added $1.73 to $95.16 a barrel.
Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• Coley Pharmaceutical Group, Inc. (COLY) up 160% on news that it will be bought by Pfizer Inc. (PFE) for $164 million.
• Global Cash Access Holdings Inc. (GCA), up 37% despite news of an analyst downgrade.
• Questcor Pharmaceuticals Inc. (QSC) up 12% on news of a new director appointed.
Biggest percentage losers:
• Acacia Research-Acacia Technologies (ACTG), down 35% on news of a negative ruling in a patent infringement trial with Microsoft Corp. (MSFT).
• The9 Limited (NCTY), down 31% on news of an analyst downgrade and a decline in third-quarter net income.
• Chordiant Software Inc. (CHRD), down 21% on news that its fiscal 2008 profit guidance failed to impress analysts.
