Small caps lose big
The bears roared today as the Russell 2000 (NYSE: IWM) and the Dow Jones Industrial Average (INDU) lost ground due to renewed credit fears. The small-cap index dropped 11.80 points, or 1.40%, to 829.37. The Dow retreated 108.28 points, or 0.77%, to 13,984.80.
On a year-to-date basis, the Russell 2000 has increased 5.33%, while the Dow has added 12.11%.
Fears that this summer’s credit problems are still active spread throughout Wall Street today, leading to a steep sell-off.
It all started after Citigroup Inc. (NYSE: C) reported a 57% drop in its third-quarter profit. Net income at the New York-based bank, the largest in the U.S., was $2.38 billion, or $0.47 per share, compared with $5.51 billion, or $1.10 a share, during the same quarter a year earlier.
Citigroup blamed losses from subprime and leveraged loans, fixed-income trading and its U.S. consumer business for the decline in earnings.
Also dragging the financial sector down was news that Citigroup, Bank of America Corp. (NYSE: BAC) and JPMorgan Chase & Co. (NYSE: JPM) will be pooling money to prevent investment funds from having to dump assets into the market.
The pool will try to prop up about $400 billion of structured investment vehicles, which have had trouble refinancing their debt and may even have to sell off assets to pay back investors.
Small-cap stocks opened in positive territory but quickly lost their grip and descended into the red. With no major economic news coming out today and little on the mergers and acquisitions front, the bulls packed their bags and went home.
Here are the day’s biggest percentage gainers and losers, along with top volume leaders, among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• Sequenom Inc. (SQNM), up 15% to $10.13.
• Netscout Systems Inc. (NTCT), up 14% to $12.78.
• EXACT Sciences Corp. (EXAS), up 14% to $5.51.
Biggest percentage losers:
• HSW International Inc. (HSWI), down 24% to $7.44.
• PRIMEDIA Inc. (PRM), down 17% to $10.95, on news of a lowered 2007 forecast.
• Advanced Battery Technologies Inc. (GBT), down 16% to $5.57.
Volume leaders:
• ViaCell Inc. (VIAC) 9,960,700 shares traded.
• The Children’s Place Retail Stores, Inc. (PLCE) 5,206,300 shares traded.
• Beazer Homes USA, Inc. (BZH) 2,717,100 shares traded.
