Small caps stay strong
The Russell 2000 (NYSE: IWM) is posting gains this afternoon as investors respond to better-than-expected earnings from Wal-Mart and a drop in the price of oil. At 2:17 p.m. ET, the small-cap index had advanced 14.25 points, or 1.86%, to 781.34. The Dow Jones Industrial Average (INDU) was up 223.54 points, or 1.72%, to 13,211.09.
Futures were higher and the day began on a bullish note following news that Wal-Mart Stores Inc. (NYSE: WMT) reported a 7.9% increase in third-quarter profit at its U.S. stores, while revenue rose 8.9%. The increase was primarily due to discounts that began two weeks earlier than last year.
The result pleasantly surprised analysts and eased fears that the U.S. consumer was cutting back on spending. Americans do about 10 percent of their shopping at the Bentonville, Ark.-based retailer.
Stocks’ upward trajectory was not affected by news that Bank of America Corp. (NYSE: BAC) is projecting a fourth-quarter pre-tax charge of $3 billion due to its purchase of collateralized debt obligations. Like many other financial actors, the second largest bank in the United States is taking a hit from fallout of the stagnation in the housing market.
Collateralized debt obligations are loans—such as mortgages—that are pooled together and sold to institutional investors as a package.
Meanwhile, the price of oil has dropped $3.83 to $90.79 after the International Energy Agency lowered its forecast for global oil demand in 2008. The Paris-based intergovernmental organization also lowered its forecast for oil demand in the fourth quarter of 2007.
Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• Triad Guaranty Inc. (TGIC), up 24%. A company representative could not be reached for comment.
• BIDZ.com Inc. (BIDZ), up 17% on news of a rise in third-quarter profit.
• Veraz Networks Inc. (VRAZ) up 19% on news of a partnership with Alvarion Ltd. (ALVR) to deliver multimedia products.
Biggest percentage losers:
• TravelCenters of America LLC (TA), down 20% on news it swung to a third-quarter loss.
• Akeena Solar Inc. (AKNS), down 21% on news of a wider third-quarter loss.
• Nastech Pharmaceutical Company Inc. (NSTK), down 15%. A company representative could not be reached for comment.
