Small caps continue descent
Small caps declined after the opening, made a brief resurgence during the second hour of regular trading but have continued their descent in the afternoon. Concerns about the financial sector and FedEx Corp.’s (NYSE:FDX) warning that low demand and high fuel costs will impact profits kept investors gloomy. At 1:39 p.m. ET, the Russell 2000 (NYSE:IWM) was off 9.03, or 1.23%, at 727.54.
Regional banks are taking a beating, with Marshall & Iisley Corp. (NYSE:MI) sinking 4% to a new 52-week low on analyst downgrades while Zions Bancorporation (Nasdaq:ZION) also set a fresh 52-week low, losing about 3%. Unfortunately, the news remains depressing for banks and other financial stocks, with Fifth Third Bancorp (Nasdaq:FITB) losing 14% during the afternoon session. Within the financial arena, large-cap futures and commodities broker MF Global (NYSE:MF) is plunging some 38% after the Bermuda-based firm said revenues were below the forecast and news that the company will sell convertible securities to raise capital and pay down debt.
Outside of the financial world, FedEx earnings came in below the forecast, and their gloomy 2009 outlook reflected sagging demand and surging energy costs. FedEx projected fiscal-year earnings of between $4.75 and $5.25 per share, below the $5.92 per share that Wall Street predicts.
In afternoon trading, crude oil has declined to $132.54 a barrel. The decline follows a morning rally and could extend oil’s three-day losing streak.
Broad market sectors on the slide include printing services, construction and agricultural machinery, auto and truck parts, non-cyclical crops, airline transportation and casinos. Sectors attracting buyers included coal energy, railroad transportation, water transportation, health-care drugs and mail-order and catalog retailers.
Small caps of note included IPC The Hospitalist Co. Inc. (Nasdaq:IPCM), which was off about 12% after updating its 2008 outlook. The Aristotle Corp. (Nasdaq:ARTL) was down about 4%. Lindsay Corp. (NYSE:LNN), a provider of irrigation systems and infrastructure products, is down some 12% after reporting weak third-quarter earnings.
On the upside, MEDecision, Inc. (Nasdaq:MEDE) is skyrocketing 282% after it agreed to be acquired by insurer Health Care Service Corp for about $121 million, or $7 a share. Brigham Exploration Co. (Nasdaq:BEXP) was up about 3%, on news that the firm announced the first of six wells it plans to drill in Southern Louisiana.
