Small caps dip
The Russell 2000 (NYSE: IWM) slipped into the red as gains that started off the day on news of possible asset sales by big banks were overshadowed by weak new home sales data. After trading above 782, the small-cap index dropped 1.80 points, or 0.23%, to 771.71. The Dow Jones Industrial Average (INDU) gained 5.69 points, or 0.04%, to 13,365.54.
On a year-to-date basis, the Russell 2000 is off 1.995%, while the Dow is up 7.15% and the S&P 500 has risen 4.37%.
The Commerce Department reported shortly after the start of trading this morning that sales of new U.S. homes plummeted by a more-than-expected 9% to a seasonally adjusted annual rate of 647,000, a 12-year low. Economists were expecting that new home sales would fall to 715,000 from 728,000 in October.
On account of the bleak housing data, treasuries climbed to their highest in two weeks, nearing the best year since 2002. In contrast, the dollar slipped versus the euro for the sixth day, the longest descent since October.
Among the major positive news of the day, Citigroup Inc. (NYSE: C) and HSBC Holdings are among U.S. and European banks that are considering major asset sales, The Wall Street Journal reported this morning. Citigroup could sell an 80%-held student loan, its North American auto-lending unit, its 24% stake in Brazil credit-card operation Redecard and the bank's Japanese consumer finance business. HSBC might liquidate its auto-finance business.
Adding to the sanguine news, the Chicago arm of the National Association of Purchasing Managers reported that business activity in the Chicago area expanded in December, topping expectations.
The index jumped to 56.6, compared with 52.9 in November. Analysts were predicting an index of 52. Readings above 50 signify economic expansion.
Gold futures and crude-oil futures rocketed mid-day on the weakening dollar and on the heels of yesterday’s assassination of Benazir Bhutto, the former Pakistani prime minister.
A gold contract for February delivery increased $10.30 to $842.10 an ounce. Crude-oil futures increased $0.61 to $97.23 per barrel for a February contract.
Biggest percentage gainers:
• Ascent Solar Technologies Inc. (ASTIZ), up 46.95% to $15.40.
• Jacksonville Bancorp Inc. (JXSB), up 31.07% to $13.38.
• Broadway Financial Corp. (BYFC), up 20% to $9.48.
Biggest percentage losers:
• Centerline Holding Co. (CHC), down 25.02% to $7.70 on news that the real estate finance and investing firm is lowering its 2007 outlook on a $45 million to $55 million charge in the fourth quarter due to a securitization of the company's $2.8 billion tax-exempt affordable housing bond portfolio with Freddie Mac.
• Christopher & Banks Corp. (CBK), down 13.62% to $11.16 on news that the women's apparel retailer forecasted a decline in December same-store sales and lowered its fourth-quarter profit guidance.
• Fuel Systems Solutions, Inc. (FSYS), down 12.88% to $14.75.
