Small caps struggling
The Russell 2000 (NYSE: IWM) and the other major U.S. indices are in negative territory due to more credit concerns. At 2:37 p.m. ET, the small-cap index had lost 9.27 points, or 1.23%, to 745.76. The Dow Jones Industrial Average (INDU) was missing 50.81 points, or 0.39%, to 12,930.07.
The bears have returned to action this afternoon following news that HSBC Holdings PLC (NYSE: HBC), Europe’s largest bank, may need to rescue two of its funds by putting $45 billion of their assets onto its balance sheet.
Additionally, the London-based financial services giant may face losses of up to $12 billion due to bets placed on securities backed by subprime mortgages, according to an analyst from Goldman Sachs Group, Inc. (NYSE: GS).
The news once again demonstrates that losses associated with the meltdown in the subprime mortgage sector continue to plague the financial system. Many financial institutions have had to deal with tighter liquidity and have responded by tightening credit. A number of U.S. mortgage lenders have even gone bankrupt.
Contributing to the credit jitters is Citigroup Inc. (NYSE: C), which announced today that it is looking for ways to improve efficiency and cut costs after mortgage writedowns led it to report a loss in its most recent quarter. News reports claim the New York-based bank could cut anywhere between 17,000 and 45,000 jobs in an effort to return to profitability.
Elsewhere, the price of oil has eased $0.72 to $97.46.
Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• Hoku Scientific Inc. (HOKU), up 43% on news it has signed a $306 million contract to supply polysilicon to Solarfun Power Holdings Co. Ltd. (SOLF).
• James River Coal Co. (JRCC), up 27% on news of an agreement for new coal shipments.
• U.S. Shipping Partners L.P. (USS), up 16% on news that it expects to pay the $0.45 fourth-quarter distribution on its common units in full.
Biggest percentage losers:
• Medivation Inc. (MDVN), down 14%. A company representative could not be reached for comment.
• Santander BanCorp (SBP), down 14%.
• BIDZ.com, Inc. (BIDZ), down 13%.
