Small caps recover, now flat
The Russell 2000 (NYSE: IWM) has rebounded from losses this morning and is now little changed from its starting level. At 1:48 p.m. ET, the small-cap index had added 1.13 points, or 0.14%, to 791.56. The Dow Jones Industrial Average (INDU) was up 51.46 points, or 0.38%, to 13,594.86.
Small-cap stocks can’t seem to gain any traction, despite a generally bullish opening on news that Citigroup Inc. (NYSE: C) has hired an expert to manage its $43 billion subprime mortgage portfolio and a raised price target for Internet giant Google Inc. (Nasdaq: GOOG).
The indices opened with a rise, but the bulls were held by news that Redbook Research, a publisher of statistics on the U.S. Retail Market, reported a 0.4% drop in U.S. chain store sales in the final week of October. With consumption comprising about 70% of gross domestic product, a slowdown could spell trouble for the economy.
The Russell 2000 fell into the red about 30 minutes after the start of trading, but has been rising cautiously since bottoming out at 11 a.m. ET.
Meanwhile, the price of oil has added $2.71 to $96.69 a barrel as the U.S. Energy Information Administration said that world oil demand growth in the fourth quarter of 2007 and the first quarter of 2008 will be higher than it previously forecast.
The recent turmoil will focus attention on the U.S. Federal Reserve. Chairman Ben Bernanke will be in Texas at a summit on microfinance in the United States this afternoon before heading to Congress for a testimony before the congressional Joint Economic Committee on Thursday.
Bernanke’s comments will be analyzed for clues about the current state of the U.S. economy and hints about future monetary policy action.
Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• DivX Inc. (DIVX), up 29% on news of third-quarter earnings that beat expectations.
• Chesapeake Corp. (CSK), up 27% on news that third-quarter profit beat expectations.
• Valassis Communications Inc. (VCI), up 21% on news that third-quarter income more than doubled.
Biggest percentage losers:
• Momenta Pharmaceuticals Inc. (MNTA), down 58% on news of a new drug being put on hold by regulators.
• Emageon Inc. (EMAG) down 33% on news of a third-quarter loss.
• Albany Molecular Research Inc. (AMRI), down 31% on news that third-quarter earnings missed expectations.
