Small caps open modestly
Small-cap stocks opened modestly higher after a see-saw overnight session. At 9:56 a.m. ET, the Russell 2000 (NYSE:IWM) was down 0.26, or 0.04%, at 703.45, as the market trimmed away opening gains in choppy action. Stability in the foreign exchange market, a decent batch of overnight earnings and mild short profit-taking provided mild support for stocks but the market appeared to be searching for a more dynamic directional bias this morning.
The U.S. dollar was up modestly at the beginning of U.S. trading and crude oil was down a couple bucks off Tuesday’s record high, which may have prompted a mild sigh of relief that the moves weren’t immediately extended. Still, the issue of a sluggish economy, coupled with rising food and energy costs, remains a major roadblock for equity market bulls. A USA Today poll said that rising food costs were a “significant” worry for Americans, with 73% of respondents citing higher grocery bills as a concern.
The market has seen quite a bit of daily volatility in recent days, with percentage moves in the 2% or more range every other day for six sessions. If that pattern holds true today, then this will be the “quiet” day on the rollercoaster ride. From a charting standpoint, the Russell has support today near 700, 695 and then a window down to 685. On the upside, resistance is near 708, then at 715 and 724.
Small-cap stocks reporting earnings later this morning include: First Community Bancshares Inc. (Nasdaq:FCBC), Northwest Pipe Co. (Nasdaq:NWPX) and Pzena Investment Management Inc. (NYSE:PZN) all at 11:00 a.m. ET. Ambassadors Group Inc. (Nasdaq:EPAX) and Zones, Inc. (Nasdaq:ZONS) are slated to release at 11:30 a.m. ET.
On the political front, Hillary Clinton generated a big win in the Pennsylvania primary last night, which should extend the contest for a Democratic nominee for the presidential election race this fall. The Clinton primary victory did not appear to have an impact on market prices.
A big percentage advance was registered early today in Sirtris Pharmaceuticals (Nasdaq:SIRT), with the stock up a whopping 81% on heavy volume on news that GlaxoSmithKline (NYSE:GSK) would but the company for $720 million in cash. ANADIGICS Inc. (Nasdaq:ANAD) was up 35% following earnings results yesterday, and Silicon Graphics (Nasdaq:SGIC) was up about 19% without any fresh news. On the downside, Daktronics (Nasdaq:DAKT) was down 25% after sloppy earnings, and Rimage Corp. (Nasdaq:RIMG) was down 19% after releasing first quarter earnings. Wavecom (Nasdaq:WVCM) was down 18% early, also in the wake of earnings news.
Early sector moves of interest are health-care facilities, tobacco and electrical manufacturing services on the upside, while gold, railroads, coal and homebuilders are taking a hit.
