Russell 2000 up with surprise gain
The Russell 2000 (NYSE: IWM) has rebounded from earlier losses and is posting a solid gain. At 1:30 p.m. ET, the small-cap index had added 3.25 points, or 0.47%, to 700.68. The Dow Jones Industrial Average (INDU) was down 18.61 points, or 0.15%, to 12,482.50.
Small-cap stocks have recovered after hitting their lowest point during the first half of trading at about 11 a.m. ET, when the index fell to a level just above 690 points.
The bounce has no apparent explanation, but it’s likely that investors took a second look at JPMorgan Chase & Co. (NYSE: JPM).
The New York-based banking heavyweight reported that fourth-quarter net income declined 21% to $3 billion, or $0.86 per share, compared with $3.9 billion, or $1.09 per share a year earlier. The result is below analysts’ expectations and largely attributed to about $1.3 billion in writedowns due to bets made on securities backed by subprime mortgage loans.
But the third largest U.S. bank also reported that it added $2.3 billion to its credit reserves for the 2007 year and saw its fourth-quarter revenue rise above Wall Street’s projections.
In economic news, the U.S. Labor Department reported before the start of trading that consumer prices rose 0.3% in December. That’s above economists’ projected increase of 0.2%, but below November’s 0.8% jump.
December core inflation, which excludes food and energy, was 0.2%, following an increase of 0.3% in November. For all of 2007, core inflation was 2.4%, which is slightly above the U.S. Federal Reserve’s preferred range between 1% and 2%.
Meanwhile, the Mortgage Bankers Association announced before the start of trading that an index of mortgage loan application volume increased an impressive 28.4% for the week ended Jan. 11 to the highest level in almost four years.
Overall mortgage applications are 35.9% above their year-ago level, suggesting that some Americans are seeing falling home prices as a buying opportunity.
Elsewhere, the price of oil is down $1.91 to $89.99 a barrel on news of a report by the U.S. Energy Information Administration that inventories of crude oil increased for the week ended Jan. 11.
Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• VistaCare, Inc. (VSTA), up 19% on news it will be acquired by Odyssey HealthCare Inc. (ODSY) for about $147.1 million.
• Hi-Tech Pharmacal Co., Inc. (HITK), up 20% on news the U.S. Food and Drug Administration has granted approval for one of the company’s drug candidates.
• MTR Gaming Group, Inc. (MNTG), up 13% on news of strong revenue from table games and poker for the three-week period ended Jan. 13.
Biggest percentage losers:
• Stereotaxis, Inc. (STXS), down 22% on news of fourth-quarter guidance below expectations.
• California Pizza Kitchen, Inc. (CPKI), down 22% on news it has lowered its fourth-quarter guidance.
• PFF Bancorp, Inc. (PFB), down 18% on news that it expects a provision for loan and lease losses in the third quarter.
