Small caps sink as GE disappoints
The Russell 2000 (NYSE:IWM) fell as news of an unexpected decline in first-quarter profit at General Electric Co. (NYSE:GE) sparked a sell-off. The small-cap index let go 19.26 points, or 2.72%, to 688.16. The Dow Jones Industrial Average declined 256.56 points, or 2.04%, to 12,325.42.
On a year-to-date basis, the Russell 2000 has shed 10.17%, while the Dow has retreated 7.08% and the S&P 500 is down 9.23%.
Small caps opened lower and moved deeper into the red throughout the session following news before the start of trading that General Electric suffered an unexpected decline in first-quarter profit and lowered its full-year 2008 earnings guidance.
The Fairfield, Conn.-based company, which rarely misses analysts’ expectations, is considered an economic bellwether due to its size and reach.
Another indicator pointing to serious economic problems came after the start of trading when Reuters/University of Michigan reported that its index of consumer confidence fell to a worse-than-expected reading of 63.2 in April, the lowest level since 1982. In March the index came in at 69.5.
Among the small-cap losers today was C&D Technologies, Inc. (NYSE:CHP). The Blue Bell, Pa.-based maker of standby power systems reported after the close on Thursday that its fourth-quarter loss was $10.3 million, or $0.40 per share, below analysts’ consensus estimate of a loss of $0.10 per share.
“2008 was very much a transition year for C&D Technologies and we accomplished a great deal,” CEO Jeff Graves said in a conference call. Graves expressed confidence that the company will turn a profit by the end of 2008.
Meanwhile, companies making computer storage devices were the worst-performing industry group today. Among those seeing their stock decline was small-cap Adaptec Inc. (Nasdaq:ADPT).
Similarly, shares of San Jose, Calif.-based Quantum Corp. (NYSE:QTM) tumbled 5%, while Dot Hill Systems Corp. (Nasdaq:HILL) eased 2%.
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:
• EuroBancshares Inc. (Nasdaq:EUBK), up 28% to $5.92 on news of an analyst upgrade.
• The Pantry Inc. (Nasdaq:PTRY), up 12% to $12.74.
• Seneca Foods Corp. (Nasdaq:SENEA), up 11% to $20.74.
• Ixia (Nasdaq:XXIA), down 18% to $6.34 on news it has lowered its first-quarter earnings forecast.
• Intervoice Inc. (Nasdaq:INTV), down 16% to $6.81 despite news of a fourth-quarter profit.
• BioForm Medical, Inc. (Nasdaq:BFRM), down 15% to $5.12.
Volume leaders:
• The Pantry Inc. (Nasdaq:PTRY) 5,135,300 shares traded.
• USEC Inc. (NYSE:USU) 4,551,800 shares traded.
• Pier 1 Imports, Inc. (NYSE:PIR) 3,999,400 shares traded.
The day saw 48 small-cap stocks set 52-week lows, while one small cap established a 52-week high.
