Small caps rising
The Russell 2000 (NYSE: IWM) is rising despite news of weak U.S. retail sales in October.
At 10:41 a.m. ET, the small-cap index had added 1.5 points, or 0.19%, to 777.46. The Dow Jones Industrial Average (INDU) was down 39.75 points, or 0.30%, to 13,260.27.
Small-cap stocks are moving up this morning while investors are digesting both bearish and bullish news and listening to U.S. Federal Reserve Ben Bernanke’s congressional testimony.
The bears like news that U.S. retailers posted weak sales in October. Many retailers blamed the warm weather for stalling sales of cold-weather items and the higher price of gasoline, which is pinching consumers’ wallets.
Wal-Mart Stores Inc. (NYSE: WMT), which saw a sales increase of just 0.4%, exemplifies the sector’s unimpressive performance.
Among small-cap retailers, shares of Hot Topic Inc. (Nasdaq: HOTT) cooled off due to news of a decline in October sales, while Christopher & Banks Corp. (NYSE: CBK) reported a 22% in October sales. Women’s fashion retailer New York and Company, Inc. (NYSE: NWY) also announced an increase in October sales.
The Russell 2000 futures were higher as the bulls reacted to news that automaker Ford Motor Co. (NYSE: F) reported that it expects to break even in 2007 following a narrower third-quarter loss. The company beat Wall Street’s expectations by posting a loss of $380 million, compared with a loss of $5.2 billion a year earlier.
Elsewhere, British mining company Rio Tinto rejected a buyout offer from Australia’s BHP Billiton Ltd. The denial spread speculation of more possible mergers and acquisition activity.
Fed Chairman Ben Bernanke is speaking to the congressional Joint Economic Committee this morning, telling lawmakers about the current state of the U.S. economy. His remarks are closely watched by investors.
Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• Restoration Hardware Inc. (RSTO), up 138% on news it is being acquired for $267 million.
• W.P. Stewart & Co. (WPL), up 24%. A company representative declined to comment.
• Sonesta International Hotels Corp. (SNSTA), up 20%. Treasurer Boi Vanriel attributed the movement to a large order of the thinly traded stock.
Biggest percentage losers:
• Kenexa Corp. (KNXA), down 35% on news that it cut its full-year earnings guidance below Wall Street estimates.
• Hardinge Inc. (HDNG), down 37% despite news of a rise in third-quarter profit.
• American Railcar Industries Inc. (ARII) down 27% on news of a third-quarter profit decline.
