Small caps post a gain
The Russell 2000 (NYSE: IWM) rebounded after three consecutive losses as investors cheered upbeat earnings news from Goldman Sachs. The small-cap index advanced 15.00 points, or 2.03%, to 754.06. The Dow Jones Industrial Average (INDU) rose 65.27 points, or 0.50%, to 13,232.47.
On a year-to-date basis, the Russell 2000 is down 4.24%, while the Dow is up 6.08% and the S&P 500 has added 2.71%.
Small-cap stocks began and ended the session on a bullish note following news that investment bank Goldman Sachs Group Inc. (NYSE: GS) reported a rise in fourth-quarter profit and beat Wall Street’s expectations.
Unlike many of its rivals, Goldman Sachs has not been seriously affected by the meltdown in the subprime mortgage sector. However, the New York-based company cautioned that some of the world’s capital markets will remain in turmoil in the near future.
Investors apparently disregarded the warning, just like they did news that U.S. housing starts in November declined 3.7% to a seasonally adjusted annual rate of 1.187 million, according to the Census Bureau.
That’s the slowest pace in 16 years but a whisker above the annual rate forecasted by economists. November housing starts are 24.2% below the revised annual rate of 1.565 million units in November 2006.
The same report also showed that building permits, a sign of future construction, fell 1.5% to an annual rate of 1.152 million. That decline is in line with economists’ projections.
Separately, the International Council of Shopping Centers announced that U.S. retailers saw chain store sales grow 1.4% for the week ending Dec. 15.
“Unfortunately, retailers were battered by several forces this past week, including storms and a procrastinating consumer,” said Michael Niemira, the trade association’s chief economist, in a statement. “According to an ICSC-UBS household holiday-tracking survey, consumers are completing their holiday shopping slower than they have in the last four years since these surveys have been taken.”
Unimpressive retail sales are a sign of slowing consumer demand, which goes along with the forecasts of many economists.
The downbeat economic news eventually woke up the bears, and the Russell 2000 and the Dow fell into negative territory for about an hour between 12 p.m. ET and 1 p.m. ET. But the bulls quickly returned and helped stocks rise anew.
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:
• Visicu Inc. (EICU), up 33% to $11.77 on news it is being bought by Royal Philips Electronics NV for $430 million.
• Canadian Solar Inc. (CSIQ), up 27% to $26.88 after the company received a favorable mention in an online article.
• Prospect Capital Corp. (PSEC), up 22% to $13.68 on news it has declared a second fiscal quarter dividend of $0.395 per share.
Biggest percentage losers:
• BabyUniverse, Inc. (KIDS), down 26% to $5.75 on news of a wider-than-expected third-quarter loss.
• ChemGenex Pharmaceuticals Ltd. (CXSP) down 12% to $13.30.
• Einstein Noah Restaurant Group, Inc. (BAGL), down 10% to $16.35 despite news that the University of Texas at Arlington will offer the company’s products.
Volume leaders:
• Visicu Inc. (EICU) 6,583,600 shares traded.
• NovaGold Resources Inc. (NG) 6,448,000 shares traded on news drill results from a project in Alaska suggest there could be more resources than previously estimated.
• Canadian Solar Inc. (CSIQ) 5,764,200 shares traded.
The day saw 93 small-cap stocks set 52-week lows, while nine small caps established 52-week highs.
