Stocks climb into the green
The Russell 2000 (NYSE: IWM) and the Dow have reversed declines from earlier this session, after the Federal Reserve said it will inject liquidity into the market quelling investors’ concerns surrounding the worst jobs report in five years.
At 10:49 a.m. ET, the small-cap index was up 4.63 points, or 0.70%, to 667.41. The Dow Jones Industrial Average (INDU) had advanced 26.46 points, or 0.22%, to 12,066.85.
To ease the latest shocks to the economy, the Federal Reserve said this morning that it will increase the amount of loans it makes to banks. Specifically, the central bank augmented auctions of four-week funds to banks to $50 billion from its original $30 billion planned for March 10 and March 24. The Fed also said it will avail an additional $100 billion through repurchase agreements.
In a statement, Fed officials also stipulated that the central bank will continue auctions for at least six months, and would increase the size of such auctions further if needed.
Before the open, the Labor Department reported that payrolls plunged a more than forecasted 63,000 in the month of February, heightening recession fears and causing gyrations early in the session.
Economists were forecasting an increase in payrolls of 25,000 for February. Today’s data comes on the heels of a larger-than-anticipated decline in payrolls in January of 17,000.
The unemployment rate was essentially unchanged at 4.8%, compared with 4.9% in January. Economists were projecting the unemployment rate to edge up to 5%.
Average hourly earnings rose by $0.05, or 0.3%, over the month, according to the Labor Department.
In small-cap news, PeopleSupport, Inc. (PSPT), provider of offshore business process outsourcing services, is taking it in the chin this morning after Piper Jaffray and RBC Capital Markets downgraded the stock to “neutral” and “sector perform” from “buy” and “out perform,” respectively.
The downgrades come as the small cap issued first-quarter and full-year guidance below the consensus on Wall Street, as the company remains under pressure from a weakening economy.
Susquehanna Financial analyst Samuel Saunders also prefers to remain on the sidelines. “While the operating environment is becoming more challenging and call volumes are under pressure due to the weakening economy, recent M&A overtures and a potentially aggressive buyback program could put a floor on the stock,” the analyst wrote in a research note today.
Shares of AngioDynamics (ANGO) are also swooning after the medical devices provider reported this morning that it expects to report third-quarter sales results below the consensus on Wall Street.
First Place Financial Corp. (FPFC) is leading percentage gainers this morning, up 19.6%, after the regional bank was upgraded by Keefe Bruyette to “outperform” from “market perform”
Smith & Wesson Holding Corp.’s (SWHC) shares are seeing upside this morning after the handgun manufacturer reported a third-quarter loss narrower than anticipated on the Street.
