Small caps rise on easing oil
Small-cap stocks opened flat, rose higher in morning trading, and have settled down in midday action. Investors were encouraged by easing crude oil and NRG Energy’s (NYSE:NRG) $11.3 billion offer to buy power generation company Calpine Corp. (NYSE:CPN). At 12:21 p.m. ET, the Russell 2000 (NYSE:IWM) was up 6.71, or 0.92%, at 733.82.
News that NRG Energy tendered a bid to buy Calpine Corp. for a stock deal worth $11 billion injected some enthusiasm back into the M&A picture, and played a supportive role in market psychology. Calpine shares were up 7.07% in midday trading.
Large caps in the news early today include Pfizer Inc. (NYSE:PFE), which tumbled 1.36% on news that its anti-smoking drug had serious side effects. Also, NetApp Inc. (Nasdaq:NTAP) tumbled about 6% as the company’s forward projections disappointed.
Among broad market sectors, apparel retailers, fabricated plastics and rubbers, catalog and mail order retailers and trucking companies were on the upside. Sectors attracting sellers include water transportation, oil well services and equipment, gold and silver and raw construction materials.
Individual small-cap stocks of note attracting buyers this afternoon include Santander BanCorp (NYSE:SBP), up some 20% despite no news. VNUS Medical Technologies (Nasdaq:VNUS) is surging about 20% midday, breaking through its 50- and 200-day averages but without apparent fresh news as a catalyst.
On the downside, Mexco Energy Corp. (AMEX:MXC) is down about 28% despite no significant announcements. Blue Coat Systems Inc. (Nasdaq:BCSI) tumbled 24%, gapping lower on sloppy earnings news. Fieldpoint Petroleum Corp. (AMEX:FPP) is down some 20% despite no news but likely fueled by easing crude oil prices.
Miami-based Perry Ellis (Nasdaq:PERY) reported late Wednesday that its first-quarter profit edged down to $9.1 million, or $0.60 per share, above Wall Street’s expectation of earning $0.55 per share.
George Feldenkreis, CEO of Perry Ellis, said during a morning conference call that the worst might be over for apparel and retail companies.
“A few months ago when we saw the meltdown of the stock prices of apparel and retail companies, we were of the opinion that things were not as bad as some analysts expected it to be. We are still of the same opinion,” Feldenkreis said.
