Weak housing data trims Russell 2000 gains
The Russell 2000 (NYSE: IWM) is gaining ground on the second-to-last trading day of the year amid news of possible asset sales by big banks. However, gains are being tempered by news of new home sales in the U.S., which fell more than expected during November. After trading above 782, the Russell dipped to 776 almost immediately after the housing data was released.
The Commerce Department reported that sales of new U.S. homes fell by 9% in November to a seasonally adjusted annual rate of 647,000. Economists were expecting that new home sales would fall to 715,000 from 728,000 in October.
At 11:27 a.m. ET, the small-cap index was up 4.92 points, or 0.64%, to 778.43. The Dow Jones Industrial Average (INDU) was up 26.98 points, or 0.2%, to 13,386.59.
Citigroup Inc. (NYSE: C) and HSBC Holdings are among U.S. and European banks that are considering major asset sales, The Wall Street Journal is reporting this morning. Citigroup could sell an 80%-held student loan, its North American auto-lending unit, its 24% stake in Brazil credit-card operation Redecard and the bank's Japanese consumer finance business. HSBC might liquidate its auto-finance business.
In other economic news, the Chicago arm of the National Association of Purchasing Managers reported that business activity in the Chicago area expanded in December, which topped expectations.
The index increased to 56.6, compared with 52.9 in November. Analysts were predicting an index of 52. Readings above 50 signify economic expansion.
In small-cap news, a judge ruled Thursday that The Finish Line, Inc. (Nasdaq: FINL) must complete its $1.5 billion acquisition of mall retailer Genesco Inc. (NYSE: GCO) because it and advisor UBS reportedly knew about risks to Genesco's earnings. Finish Line said it may appeal.
Stocks also advanced as investors increased odds that the Federal Reserve will cut interest rates, quelling concerns of a recession.
Gold futures for February delivery increased $4.70 at $836.50 an ounce. Gold has continued to gain as investors seek a safe haven from the weakening dollar and fallout from yesterday’s assassination of Benazir Bhutto, the former Pakistani prime minister.
Crude-oil futures also increased, with the February contract rising $0.45 to stand at $97.07 per barrel.
Biggest percentage gainers:
• CDC Corporation (Nasdaq: CHINA), up 21.9% to $5.01 on news of significant stock repurchases by company executives and directors.
• Beasley Broadcast Group, Inc. (Nasdaq: BBGI), up 18.3% to $6.09 after falling to an all-time low last week.
• Crescent Banking Co. (Nasdaq: CSNT), up 14.6% to $13.94.
Biggest percentage losers:
• Centerline Holding Co. (NYSE: CHC), down 16.5% to $8.58 on news that the real estate finance and investing firm completed a securitization of the company's $2.8 billion tax-exempt affordable housing bond portfolio with Freddie Mac.
• Carrollton Bancorp (Nasdaq: CRRB), down 15.1% to $11.88.
• Christopher & Banks Corp. (NYSE: CBK), down 14.6% to $11.04 on news that the women's apparel retailer forecasted a decline in December same-store sales and lowered its fourth-quarter profit guidance.
