Small caps open strong
The Russell 2000 (NYSE: IWM) and the other major U.S. indices are posting gains on news of unexpectedly robust earnings at International Business Machines Corp. (NYSE: IBM).
At 10:09 a.m. ET, the small-cap index had advanced 3.28 points, or 0.47%, to 707.93. The Dow Jones Industrial Average (INDU) was up 100.47 points, or 0.80%, to 12,706.77.
The mood on Wall Street is bullish on news before the start of trading that IBM, the largest information technology company in the world, reported better-than-expected preliminary quarterly results.
The Armonk, New York-based company said that it expects earnings from continuing operations for the quarter ended Dec. 31 to be $2.80 per share, above Wall Street’s consensus estimate of $2.60 per share and 24% higher than the $2.26 per share achieved a year earlier.
Elsewhere, retailer Sears Holdings Corp. (Nasdaq: SHLD) announced before the start of trading that it forecasts fourth-quarter earnings below analysts’ expectations due to a decline in same-store holiday sales.
The Hoffman Estates, Ill.-based company pointed to unfavorable economic conditions as one of the reasons explaining the shortfall.
The possibility of a decline in consumer spending, which accounts for about 70% of U.S. gross domestic product, is helping fuel fears that the economy is headed for a recession.
Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• A.S.V., Inc. (ASVI), up 45% on news it is being purchased by Terex Corp. (TEX) for about $488 million.
• Golden Cycle Gold Corp. (GCGC), up 36% on news it has entered into an agreement to be acquired by AngloGold Ashanti Ltd. for about $149 million.
• Capital Bank Corp. (CBKN), up 19%.
Biggest percentage losers:
• The Steak n Shake Co. (SNS), down 15% on news of a decline in same-store sales during the fiscal first quarter.
• Downey Financial Corp. (DSL), down 11% on news it has reclassified $99 million of loans as non-performing.
• Seattle Genetics, Inc. (SGEN), down 9% on news it plans on selling 10 million shares to raise cash.
