Russell slips into the red
After rising during morning trading, the Russell 2000 (NYSE:IWM) hit resistance at 733.59 at 10:45 a.m. ET, and has continued to slide in Wednesday’s trading action. At 1:59 p.m. ET, the Russell was down 6.12, or 0.84%, at 723.67.
Federal Reserve Bank of Kansas City President Thomas Hoenig gave the bears support after he said late Tuesday that inflationary pressures “now stand at unacceptably high levels.” Hoenig is not a current voting member of the policy-making Federal Open Market Committee. U.S. consumers are feeling the pinch on their wallet, especially with oil prices surging to record highs. In recent trading, June crude oil contracts were up $1.51 to $123.35 a barrel.
A rising U.S. dollar combined with a positive productivity report kept investors bullish during early trading. In afternoon trading, the greenback is up to $1.5387 versus the euro. The U.S. dollar closed at $1.5524 against the Euro on Tuesday.
Also encouraging the bulls was the Labor Department’s Wednesday morning announcement that non-farm business productivity increased at an annual rate of 2.2% during the first quarter. Economists anticipated a 1.5% increase. Unit labor costs rose slower than expected at an annual rate of 2.2%, compared with expectations of a 2.6% increase.
Most of the headline stocks of note this morning were positive, with Disney (NYSE:DIS) and Cisco Systems Inc. (Nasdaq:CSCO) reporting solid earnings. Disney was up about 3% in afternoon action, but Cisco dipped 1.56%, unable to sustain overnight buying interest. Also, Clearwire Corp. (Nasdaq:CLWR) and Sprint (NYSE:S) announced a deal to mesh wireless internet technology efforts. Clearwire edged up 3.28%, and Sprint was down 0.44%.
Within broad market sectors, gains were seen in security systems and services, metal mining, office equipment, iron and steel and catalog and mail-order retail. On the negative side, airlines, school services, footwear, money center banks, hotels and trucking companies are losing ground.
Among small-cap gainers, Camco Financial Corp. (Nasdaq:CAFI) rose 19% on news that it is being bought by First Place Financial Corp. (Nasdaq:FPFC). Multi-Fineline Electronix Inc. (Nasdaq:MFLX) jumped 15% on an earnings-tied boost. Ceragon Networks Ltd. (Nasdaq:CRNT) is also up more than 15% despite no major news.
On the downside, Synchronoss Technologies (Nasdaq:SNCR) collapsed over 42% as investors weren’t pleased with earnings news or swayed by a company share buyback announcement. Bidz.com (Nasdaq:BIDZ) was off about 11% after quarterly results. Kenneth Cole Productions (NYSE:KCP) is off some 18% after the New York City-based apparel and accessories maker forecasted a loss for the second quarter. OraSure Technologies, Inc. (Nasdaq:OSUR) is down about 16% after the diagnostic kits maker said late Tuesday that it expects a greater-than-expected loss during the second quarter.
