Russell 2000 stays stronger
The Russell 2000 (NYSE: IWM) and the Dow Jones Industrial Average (INDU) are down, depressed by news of record high oil prices and fears stemming from the troubled U.S. housing sector. At 1:39 p.m. ET, the small-cap index was down 2.41 points, or 0.29%, to 826.95. The Dow had retreated 63.57 points, or 0.45%, to 13,921.23.
There’s no stopping the price of oil, up $0.87 to a record high of $87 due to tight inventories as winter approaches and tensions along the border between Iraq and Turkey. On Monday the cabinet of Turkish prime-minister Tayyip Erdogan asked parliament for approval to launch an attack on Kurdish rebels in northern Iraq.
An increase in the price of oil could put the squeeze on consumers and slow down economic growth.
The bears are also emboldened by renewed fears about the state of the U.S. housing sector and the negative effects of the meltdown in the subprime mortgage market.
U.S. Federal Reserve chairman Ben Bernanke got things started when he told the Economic Club of New York after the close on Monday that the slump in the housing sector is expected to get worse and will act as a drag on economic growth into early 2008.
Wells Fargo & Company (NYSE: WFC) reported before the start of trading that net income for the third quarter was $2.28 billion, or $0.68 per share, a rise of 4% compared with a net income of $2.19 billion, or $0.64 per share, during the second quarter of 2006.
That’s a record level of earnings but below Wall Street’s projections for a profit of $0.70 per share.
“Given the severe disruption in the credit markets, it was a challenging quarter to be sure,” said president and CEO John Stumpf in a statement.
Contributing to the worries was Treasury Secretary Henry Paulson, who told an audience at Georgetown University’s law school that home construction will continue to decline and that the federal government should work to avoid foreclosures and prevent property values from falling further.
Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• Pinnacle Gas Resources, Inc. (PINN), up 24% on news that is being bought to Quest Resource Corp. (QRCP).
• SCPIE Holdings Inc. (SKP), up 23% on news it’s being purchased.
• Advanced Battery Technologies Inc. (GBT), up 21%.
Biggest percentage losers:
• Occam Networks Inc. (OCNW), down 21% on news it has restated previous quarterly results and expects a wider third-quarter loss.
• Quest Resource Corp. (QRCP), down 13% on news that it will buy Pinnacle Gas Resources, Inc. (PINN).
• Stanley Furniture Corp. (STLY), down 12% on news of a decline in third-quarter profit and revenue.
