Small caps stay positive
The Russell 2000 (NYSE: IWM) is in the green even though news of a sharp decline in November consumer confidence shaved earlier gains.
At 10:37 a.m. ET, the small-cap index had added 4.24 points, or 0.58%, to 739.31. The Dow Jones Industrial Average (INDU) had advanced 115.34 points, or 0.91%, to 12,858.78.
Wall Street was bullish before the start of trading on news that Citigroup Inc. (NYSE: C) has sold 4.9% of itself to the Abu Dhabi Investment Authority for $7.5 billion. The cash infusion will allow the largest U.S. bank to better deal with losses accumulated through bets on securities backed by subprime mortgages.
New York-based Citigroup posted a loss during the third quarter, hurt by more than $6 billion in writedowns. The bank could face even larger losses in the fourth quarter.
Futures were pointing higher and small and large-cap stocks rose out of the gate.
But the rally quickly lost steam after 10 a.m. ET, when the Conference Board announced a larger-than-expected drop in consumer confidence for November.
The index of consumer confidence fell to 87.3 from a downwardly revised level of 95.2 in October. The new reading is the lowest level in more than two years. The index was at 85.2 for October 2005, in the aftermath of Hurricane Katrina.
“Consumers’ apprehension about the short-term outlook is being fueled by volatility in financial markets, rising prices at the pump and the likelihood of larger home heating bills this winter,” said Conference Board director Lynn Franco in a statement.
Consumers also became more pessimistic about future business conditions and jobs, the business organization reported.
The Russell 2000 responded by briefly dipping into negative territory before rebounding.
Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• AspenBio Pharma, Inc. (APPY), up 33% on news that it expects to complete the U.S. Food and Drug Administration’s requirements to receive regulatory clearance for a new medical device.
• Constant Contact, Inc. (CTCT), up 12%.
• Osiris Therapeutics, Inc. (OSIR), up 11% on news of positive data from a study of a knee drug for patients with osteoarthritis.
Biggest percentage losers:
• BIDZ.com, Inc. (BIDZ), down 21% on news it reaffirmed its previous guidance for fiscal 2007 and fiscal 2008.
• Genesco Inc. (GCO), down 14% on news it has received a subpoena from a U.S. Attorney for documents related to its pending acquisition by The Finish Line Inc. (FINL).
• Medivation Inc. (MDVN) down 11% after the stock was initiated with a “sell” on Monday.
