Strike two for Russell 2000
The Russell 2000 (NYSE: IWM) and the Dow Jones Industrial Average (INDU) fell for the second day in a row on news of housing and subprime concerns and record oil prices. The small-cap index let go 6.01 points, or 0.72%, to 823.35. The Dow lost 71.86 points, or 0.51%, to 13,912.94.
On a year-to-date basis, the Russell 2000 has increased 4.56%, while the Dow has added 11.53%.
Predictions by high-level U.S. officials that the slump in the housing sector will get worse and slow down economic growth brought out the bears today, as small and large caps ended in the red for the second consecutive day.
After the close on Monday, Fed chairman Ben Bernanke said that the slump in the housing sector is expected to get worse and be a drag on economic growth going into 2008. Treasury Secretary Henry Paulson made similar comments at Georgetown University’s law school today, adding that the federal government should work to avoid foreclosures and prevent property values from falling further.
As if to confirm the downcast predictions, the National Association of Home Builders announced that its monthly home builder confidence index fell more than expected in October to a record low.
Contributing to the negative mood was news of weaker-than-expected third-quarter earnings for Wells Fargo & Company (NYSE: WFC). CEO John Stumpf blamed disruptions in the credit markets.
The financial sector was lower again today, including small caps NewStar Financial Inc. (Nasdaq: NEWS), Columbia Bancorp (Nasdaq: CBBO) and Columbia Banking System Inc. (Nasdaq: COLB). Defying the trend was First Defiance Financial (Nasdaq: FDEF).
Meanwhile, oil climbed $1.48 to $87.61 a barrel, due to tight inventories and tensions along the border between Iraq and Turkey ahead of a possible attack by Turkish forces on Kurdish rebels in northern Iraq.
Here are the day’s biggest percentage gainers and losers, along with top volume leaders, among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• Advanced Battery Technologies Inc. (GBT), up 34% to $7.47, after three days of losses.
• Yucheng Technologies Ltd. (YTEC), up 23% to $17.05 on news that it has purchased a Chinese business intelligence company.
• SCPIE Holdings Inc. (SKP), up 23% to $27.19 on news it’s being purchased.
Biggest percentage losers:
• Occam Networks Inc. (OCNW), down 32% to $6.29 on news it has restated previous quarterly results and expects a wider third-quarter loss.
• Quest Resource Corp. (QRCP), down 14% to $9.28 on news that it will buy Pinnacle Gas Resources, Inc. (PINN).
• Stanley Furniture Corp. (STLY), down 14% to $14.32 on news of a decline in third-quarter profit and revenue.
Volume leaders:
• China Precision Steel Inc. (CPSL) 12,647,300 shares traded.
• Powerwave Technologies Inc. (PWAV) 8,909,500 shares traded.
• IDT Corp. (IDT) 5,287,900 shares traded.
