Small-cap rally continues
The Russell 2000 (NYSE:IWM) has extended its gains following news of bullish earnings from Wal-Mart Stores, Inc. (NYSE:WMT). At 1:43 p.m. ET, the small-cap index had added 10.71 points, or 1.53%, to 709.09. The Dow Jones Industrial Average was up 109.60 points, or 0.87%, to 12,636.86.
Small caps initially moved into positive territory shortly before 10 a.m. ET, and have been gaining as investors react to news before the opening that Wal-Mart Stores, Inc. (NYSE:WMT) has raised its earnings estimates for the first quarter of fiscal 2009 to between $0.74 per share and $0.76 per share, up from a previous guidance calling for net income between $0.70 per share and $0.74 per share.
“Inventory in Wal-Mart Stores U.S. has been well-managed and has resulted in lower markdowns, expense leverage and reduced shrink,” CFO Tom Schoewe said in a statement.
A number of small-cap retailers have also come out with bullish news. After the close on Wednesday, 99 Cents Only Stores (AMEX:NDN) reported that its same-store sales for the fourth quarter ended March 29 increased 1.5%. Shares of the City of Commerce, Calif.-based company are up 5%.
Memphis, Tenn.-based Fred’s Inc. (Nasdaq:FRED), which sells general merchandise, is also seeing its stock appreciate despite news before the opening that March same-store sales rose 1.2%, below the expected 1.7%.
Elsewhere, women’s fashion retailer The Cato Corp. (NYSE:CTR) announced before the start of trading that sales for the five weeks ended April 5 fell 6% to $89.2 million from $95.1 million a year earlier.
The Charlotte, N.C.-based company blamed the shift of Easter to March 23 versus April 8 in 2007. On the plus side, the move is expected to favorably affect April sales.
