Small caps fall in the red on gloomy consumer survey
After a brief rise after the opening, small-cap stocks headed lower after a gloomy consumer sentiment encouraged sellers. At 12:25 p.m. ET, the Russell 2000 (NYSE:IWM) was down 7.12, or 0.96%, at 736.26.
The University of Michigan consumer sentiment survey came in at 59.5, which was below the projection of 62. The figure was the lowest May reading in 28 years, and underscores consumer trepidation about lofty gas and food prices.
April housing starts came in at an annualized rate of 1.032 million units, which was well above the forecast of 940,000. In addition, permits were up 4.9%. These numbers, however, are still weak numbers since the number was fueled by multi-family units — not single-family homes.
Oil prices touched new highs, propelled by an increase in Goldman Sachs’ oil price estimate to $141 a barrel in late 2008. In midday Friday action, crude futures were up $2.63 to $126.75 a barrel in New York.
Retailer shares remain in the spotlight today with Nordstrom (NYSE:JWN), Kohl’s (NYSE:KSS) and Abercrombie & Fitch (NYSE:ANF) all reporting earnings. Shortly after the opening, Nordstrom was up 2.2%, Kohl’s was down 2.1% and Abercrombie & Fitch was up 1.2%.
Sectors in favor during midday trading include gold and silver, oil and gas, coal, oil and gas operations and oil well services. On the downside, technology retailers, apparel retailers, department and discount stores, casinos and footwear companies are attracting sellers.
Among individual small caps, Exar Corp. (Nasdaq:EXAR) tumbled 11%, gapping lower on an earnings-related slide. Trico Marine Services (Nasdaq:TRMA) was off about 7% amid news that the company will acquire outstanding shares of DeepOcean. On the upside, China Precision Steel (Nasdaq:CPSL) was up 29%, gapping higher on earnings news.
