Stocks lower on inflation concerns
Stocks are in negative territory following news the U.S. Federal Reserve remains concerned about inflation and despite a report of strong growth in the services industry. At 11:42 a.m. ET the Russell 2000 was down 5.22 points, or 0.61%, to 849.87. The Dow Jones Industrial Average was down 67.46 points, or 0.49%, to 13,608.86.
Shares of North American Scientific, Inc. (Nasdaq: NASI) are depreciating on news the maker of products for radiation therapy treatment is still losing money. The net income for the second quarter of fiscal 2007 ended April 30 was $3.2 million, or $0.11 per share, compared with a net loss of $3.7 million, or $0.22 per share, during the same period of 2006, the Chatsworth, Calif.-based company said after Monday’s close. Analyst estimates were not available. The stock is down $0.26, or 17%, to $1.24.
Shares of Sterling, Va.-based Sutron Corp. (Nasdaq: STRN) are up $1.74, or 21%, to $9.84, following news of record bookings for the month of May. Customer orders and contracts totaled a record $9.3 million in May, the maker of systems for hydrological and meteorological monitoring reported before the start of trading. The biggest order was a $5.99 million contract to provide and install 174 water-monitoring stations in Afghanistan. Sutron also said that it has a record $19 million in revenue and backlog during the first five months of 2007.
ViryaNet Ltd. (Nasdaq: VRYA), a provider of business automation software applications, has requested that it be delisted from the Nasdaq Stock Market. Costs associated with the Sarbanes-Oxley regulations necessary to maintain listing compliance are expected to increase substantially, outweighing the benefits of continued listing, the Southborough, Mass.-based company said after Monday’s close. Shares have lost $0.25, or 8%, to $2.82.
Inflation is likely to moderate but still remains a concern, Fed Chairman Ben Bernanke said before the opening bell. Also, the economy will probably grow along the expected trend lines, despite continuing weakness in the housing sector.
Investors interpreted the remarks, which were prepared for a banker’s meeting in South Africa, as an indication that the Fed is not looking to lower interest rates anytime soon.
In other economic news, the U.S. services industries grew at the fastest pace in more than a year. The Institute for Supply Management’s index of non- manufacturing businesses rose to 59.7 in May, the not-for-profit association reported after the opening bell. A reading above 50 shows growth.
Economists said the data indicate a strengthening of the economy.
