The market showed signs of consolidation yesterday. The lack of important economic news translated into low volume and little price movement on the exchanges.

The late-session snapback rally on Tuesday brought stocks back from the depths of Monday's losses, but many observers still say that we're not out of the woods yet.

What's stalking investors in the dark woods is a bear market. Small-cap stocks on Monday were down 25 percent from the Russell 2000's most recent high of 869 on May 2nd, but Tuesday's buying spree pushed the Russell 2000 back to 'just' a 20 percent decline - the threshold for a bear market.

Still, the latest pronouncement from Federal Reserve policymakers brought the buyers out of the woods and off the sidelines, given the availability of many bargain prices for stocks.

The deadlock in Washington over reducing the federal deficit and extending the government's spending limit, along with the European economic train wreck, have weighed heavily on investors this week. Small cap stocks have taken their lumps too.

However, there were some bright spots Tuesday, even as the Russell 2000 Index lost 0.45 percent and the Standard & Poor's Small Cap 600 shed 0.33 percent. The other major U.S. stock indexes also bounced around all day and finished less than 1 percent in the red for the session.

Small cap stocks have more than come into their own in the three plus decades since the legendary small cap guru Chuck Royce revealed his potential to the world of the investing. According to Royce, today there are more than 3,100 U.S. companies identified as micro-cap with market values of up to $500 million; more than 1,100 small-cap with market values between $500 million and $2.5 billion.

Wow, small cap stocks just can't seem to get out of their own way, stretching the Russell 2000's losing streak to 6 straight days and potentially 6 straight weeks.

The small cap Russell raced higher last month to end what was the best first quarter in years. During that time several stocks have hit 52-week highs particularly over the past few weeks.

Small caps pushed higher gain today and here are the top three small cap stocks that benefitted from the rise.

The relentless push higher by stocks has many an analyst scratching his or her head right now. They can scratch away, because the bottom line is this: companies continue to beat earnings expectations. There's no way around that simple fact - so the market continues to move higher.

Stocks were sharply lower at midday on news this morning that small-cap insurer American International Group Inc. (NYSE:AIG) posted the largest quarterly loss in U.S. corporate history, down $61.7 billion in Q4.

At noon the Russell 2000 (NYSE:IWM) was down 15.25, or nearly 4%, at 373.77, while the S&P 500 was down 3.66% to 708.15, and the Dow was down 3.25% to a staggering 6,833.54 — the first time the index has dipped below 7,000 in 11 years.

Myriad data reports out today showed personal spending rose about 0.6% in January and incomes rose 0.4%, while construction spending fell 3.3%, or more than twice as much as analysts predicted. Even though manufacturing contracted in February for the thirteenth straight month, the pace was slower than expected.

Small caps bucking the downward trend this morning included business service outsourcer ICT Group, Inc. (Nasdaq:ICTG), up nearly 70% after Aegis Limited made an acquisition proposal to ICT’s board. FGX International Holdings Limited (Nasdaq:FGXI) is seeing an 18% uptick following a strong sales and earning release late last week, and Noven Pharmaceuticals is up 10% ahead of its scheduled earnings release on Thursday.

On the downside, Ship Finance International (NYSE:SFL) is down over 23% after reporting a Q4 loss last week.

A Caveman could do it

*****Warren Buffett’s annual report for Berkshire Hathaway was released over the weekend. His letter to his shareholders is one of the most widely read investment documents there is. Buffett’s down home charm, inviting sense of humor and investment savvy are always a great read...

In a minute, we’ll get to President Obama’s speech from Tuesday night. First, a small-cap recap…

Stocks slid sharply during midday trading Wednesday on weak housing data released this morning and on further stress in the financial sector as investors remain doubtful about the U.S. government’s bank plans.

The Russell 2000 (NYSE:IWM) was down 15.26, or 3.7%, to 397.22 in early afternoon trading. Small-cap decliners were leading advancers by nearly 11 to one. Meanwhile, the Dow fell 1.83% to 7,216.17, and the S&P 500 was down 1.82% to 759.07.

The Obama administration has begun making the 20 largest U.S. banks — including Bank of America (NYSE:BAC) and Citigroup (NYSE:C) — undergo "stress tests" today to see if any can weather further recessionary pressure. If any banks fail the test, the government will require them to raise capital from private sources. If this isn’t possible, the banks will be required to swap out the government’s existing, non-voting preferred shares and replace them with new preferred shares that are convertible to common stock with voting rights...

Stocks are in freefall mode at midsession on concerns that Citi's negotiations with the U.S. government for extra aid may fall flat.
 
At noon, the Russell 2000 (NYSE:IWM) was down 2.27% while the Dow was down 1.35% and the S&P 500 was down 1.71%.
 
According to The Wall Street Journal this morning, the U.S. government (which has already invested $25 billion in the ailing financial institution) was being asked to increase its aid to Citi by as much as 40%. The government would convert its preferred shares to common shares, which would leave Citi shareholders with a diluted stake, the Journal said. As the day progresses, though, investor fears have resurfaced as to how the Obama administration, which has done little to sooth ongoing market worries, will stabilize the overall banking system.
 
These banking fears, in turn, have hurt tech shares today because of a potential falloff in capital spending...

Stocks continued their steep slide this morning on rumors that major banks may nationalize as part of the financial sector rescue. The news spurred droves of investors to seek safe haven in bonds and gold, the latter of which rose above $1,000 per ounce.

The Russell 2000 (NYSE:IWM) is down 3.78, or 0.91%, to 412.93, while the Dow is down 0.94% to 7,396.10, and the S&P 500 is down 0.97% to 771.41.

Bank of America (NYSE:BAC) and Citigroup (NYSE:C), which have both lost more than 90% of their value in the last year, are seeing shares nosedive to levels seen in the early 80s and 90s on news that a nationalization of the banks is a likely possibility. BAC is down nearly 14% to $3.39, while Citigroup has tumbled 18% to about $2 even.

"It's a clear sign that the markets are expecting a high probability of them being nationalized,'' said Mike Holland, founder of Holland & Co, to CNBC. "The clear expectation is that shareholders would effectively be wiped out.''

Whitney Speaks Again

More depressing forecasts for the big banks from the best big bank analyst out there, Meredith Whitney. You may recall it was Whitney who forecast the dividend cut at Citigroup (NYSE:C) back in October 2007. That was three months before Citigroup actually cut its dividend. Whitney should also be credited as one of the few analysts to see the financial meltdown coming.

She still doesn’t like Citigroup and would be a seller at current levels.

In an interview on CNBC yesterday she said, “Most of the big banks would be lucky to break even or earn a little bit of money this year. I don’t think any of the banks that I cover will continue to pay their existing dividends.”

Apparently a few different fund managers thought it would be a good idea to add 104 million shares of Citigroup at a roughly average price of $10 and change a share. Bloomberg reports that Fidelity is down $874 million on this . . .

The Russell 2000 was holding on to a gain 90 minutes into the session, but just barely. At 10:58 a.m. ET the index was up 1.60, or 0.38%, at 424.78. The day’s high of 429.32 was posted shortly after the opening, largely in response to bargain hunting after a stronger-than-expected Conference Board report on its January index of leading economic indicators.

Dull is the New Good

They say never sell a dull market. And it’s hard to imagine a duller day than Wednesday. The Dow Industrials added 3 points. The S&P 500 lost 2 points. The loss at the Nasdaq was measured in a fraction.

Of course, after Tuesday’s plunge, I think we can all agree that dull is good, dull is progress...

Small caps were unable to hold their own today in the wake of bad housing data, the unveiling of a $75 billion mortgage relief plan and Fed Chairman Ben Bernanke’s sharp growth-view cut for 2009.

At closing, the Russell 2000 (NYSE:IWM) was down 5.72, or 1.3%, to 423.18. The Dow and S&P 500 essentially closed flat. For the year, the Russell is down nearly 15.3%, with the Dow down 13.9% and the S&P 500 down 12.7%.

Before the opening bell this morning, the Commerce Department reported that construction of new homes and apartments fell to a record low annual rate of 466,000 in January — a 16.8% drop compared with analyst predictions of a mere 5% drop. Analysts were forecasting an annual rate of 530,000 units, down from 550,000 units in December...

With the market tumbling back into shouting distance of the November bear market lows amid a crisis of confidence about the bank bail-out plan and a cacophony of worries about the time needed for stimulus plans to resuscitate the economy, a silent supportive performance element is playing out. If you’re wondering where the silver lining is in the current stormy weather, wonder no longer: small-caps are putting up a better fight than their big-cap brethren—and that’s a mild good sign for the market.

Right about now, diehard market watchers might be saying, “Hey, wait a second...the Dow is down 10.5% in 2009 and the Russell 2000 (NYSE:IWM) is off 10.2%, and getting bullish over three-tenths of one percent is silly.” While that ’09 comparison might be true, here’s the rub: the Dow is only 5.3% above the November lows, meanwhile, the Russell is actually up 20.8% from their November lows.

One of the hidden bright spots in the recent sobering price action for the stock market has been this relative out-performance in small-caps vs. large caps. This week the Dow crashed through the previous January pullback lows and notched the lowest close on daily charts since those major November lows were forged. Yet the Russell remains well clear of the January lows.

Why is it good to see small-caps holding up better on this latest test of buyer resolve? Because when the market collapsed back in September, small-caps led the panic sell-off; this time around, as the market teeters on the verge of retesting the bear market lows, it serves up some modicum of comfort to see small-caps not leading the bearish charge at this juncture...

Hold onto your hats, folks. The Russell 2000 (NYSE:IWM) notched the first weekly advance of the New Year this past week, marking the third-best weekly gain since the bear market collapse began back in mid-September. In what might be a head-scratcher to some investors, the stock market went on a bullish rampage Friday (hey, it was the third-best one-day gain of the year), shrugging off brutal employment data to focus on the pot of gold at the end of the rainbow--otherwise known as government handouts to banks.

Alas, while it’s nice to see the market snap the 2009 losing streak, small-caps are still trapped within the confines of the recent trading range parameters. Now, if we can rustle up the courage to blast through 474 this coming week, then the upside breakout target move comes in at 517 – which would be a “Katie bar the door” kind of move in this sideways consolidation environment.

For those of us caught up in the actual detail minutia of chart activity, a 61.8% Fibonacci of the January pullback is at 485.39, so if you combine a 474 breach next week with a push through 485, then 517-518 becomes a very real target (which might take a week or two to scale)...

Small-cap stocks took flight Friday, as investors gambled that a terrible report on employment would be just the tonic needed to ignite a decisive push forward on a bank bailout plan and an aggressive fiscal stimulus package. The Russell 2000 (NYSE:IWM) gained 15.63, or 3.43% to 470.70, generating the third-best daily gain of the year. For 2009, the Russell is now down 5.8%, while the Dow is off 5.6% and the S&P 500 down 3.7%.

Although it might seem peculiar for the stock market to stage one of the best rallies of the year on a day in which the unemployment rate climbed to 16-year highs and amid news that January saw the largest amount of job losses in 34 years, investors decided that the worrisome news on the job front would light a fire under lawmakers to set aside partisan politics and quickly deliver a powerful stimulus package to jump-start the ailing economy. In addition, the market was already hoping for a bank bailout plan to be unveiled Monday, and now the need to help banks and spur lending seems even more pressing.

Treasury Secretary Timothy Geithner is slated to hold a press conference Monday at noon to discuss details on the plan to stabilize the financial system and President Obama named an advisory panel on Friday led by former Federal Reserve Chairman Paul Volcker to guide the rescue effort for the economy. Obama today said it was “inexcusable and irresponsible” for lawmakers to get bogged down, distracted or delay while millions of Americans were being put out of work...

Small-cap stocks extended the morning rally into mid-session, with battered bank and financial stocks leading the way amid hope for a bank bailout plan to be rolled out early next week. At 12:36 p.m. ET, the Russell 2000 (NYSE:IWM) was up 9.21, or 2.02% at 464.29.

Looking at S&P group activity so far today, the best performers were regional banks, homebuilders, diversified banks, diverse financial services firms, auto parts companies and broadcasters. On the banking front, the KBW Banking Index jumped 9.4%, with Bank of America Corp. (NYSE:BAC) soaring 22% after getting a “buy” recommendation from analysts, and also being swept up in the bailout euphoria today.

In an interesting twist, the market decided to embrace today’s “bad” news on the employment picture as a “good” news event for the market. The argument has already been made many months ago that economic data will lag the actual market bottom and today’s sobering glimpse of a receding labor market was interpreted as just another cattle prod that can be applied to lawmakers to get things rolling on both a bank bailout and on a fiscal stimulus package.

For the record, the Labor Department said that a jolting 598,000 Americans lost their jobs in January, the largest one-month decline in 34 years. In addition, the unemployment rate climbed to 7.6%, the highest level in more than 16 years. Canada also saw the worst job loss today in more than a generation, but it hasn’t stopped their stock market from gaining 2% so far today, either...

Small-cap stocks pushed higher early Friday as investors chose a “glass half full” approach to this morning’s dreary employment data, hoping that the bad news will push lawmakers to move quickly next week to bolster the economy. At 9:54 a.m. ET, the Russell 2000 (NYSE:IWM) was up 6.44, or 1.41% at 461.52.

The employment report showed a decline in non-farm payrolls of 598,000 jobs, which was above the consensus projection for a decline of 525,000, but in line with some of the high “whisper” numbers making the rounds in recent days. The 598,000 figure marks the largest monthly decline in payrolls in 34 years, and the unemployment rate climbed to 7.6%, the highest level in 16 years.

By any measure, the jobs report presented a bleak picture of the U.S. economy, but there were some thoughts that the dismal reading will simply prod lawmakers to be more aggressive in agreeing to a big stimulus package. Our neighbors north of the border are sharing in the pain as well – Canadian job losses for January were the worst since their data history began back in 1976...

U.S. stocks are expected to open modestly lower, pressured by a dreadful look at the U.S. employment situation as non-farm payrolls shed more jobs than any month in the last 34 years and the unemployment rate climbed to 16-year highs. The bleak jobs picture was expected to overwhelm overseas gains for banks, automakers and chip stocks. The Dow was called 30 points lower, while the Russell 2000 (NYSE:IWM) was seen slightly lower, near 454.00.

Overseas markets appeared to get a lift from expectations that details of the U.S. stimulus plan will be rolled out Monday, which helped European shares look past weak ...

Small-cap stocks slipped Wednesday, as an early lift on better-than-feared economic data and firm tech stocks was overshadowed in the afternoon by worries about banks, fretting over delays in the Obama stimulus program and slumping retail stocks. The Russell 2000 (NYSE:IWM) closed down 4.42, or 0.98% at 448.48 and is now down 10.2% for 2009. The Dow is off 9.3% for the year, while the S&P 500 is down 7.9%.

Bank of America Corp. (NYSE:BAC) did a belly flop today, plunging more than 12% at one point to 18-year lows, which pulled down bank and financial stocks across a wide swath. Investors remain concerned about the fate of banks, especially any nationalization talk that would wipe out shareholder equity. Delays in the “bad bank” concept and for the overall government response to the crisis also seemed in play today; the Obama Administration is expected to make some kind of announcement about bank emergency measures next week. The latest government news today was that Obama was setting executive pay ceilings for firms accessing bailout funds.

As market watchers hunker down for the big jobs report Friday, today’s economic reports were actually a little better than predicted, which helped spark some bargain hunting buying in the stock market. Ahead of the opening today, the ADP Employment survey showed a decline in payrolls of 522,000 and the firm predicted Friday’s Labor Department report would show a decline in non-farm payrolls of 525,000, which is higher than the average guess of 500,000, but not as bad as the worst-case scenarios floating about. While the ADP report might have found mild favor with a few bulls, the 10:00 a.m. ET release of the ISM Non-Manufacturing Report clearly was the more dynamic report. Today’s ISM data provides a glimpse of the sprawling services sector that makes up about 75% of the nation’s economy. The headline figure came in at 42.9, which was markedly better than the forecast of 39.1 and which marked the ...

Using strict chart-speak, the January stock market collapse is consistent with a corrective pullback off the November-January rally. Of course, chart-speak doesn’t fully appreciate the relentless volatility and false breakouts of recent price direction. Aren’t these elongated consolidations supposed to be a little more vanilla and a lot less jalapeno?

I suppose it’s only fitting that the market collapsed hard Thursday and Friday to wipe out what looked like the first winning week of the New Year. After all, if the market is going to carve out the worst January in history, it might as well do it with a bang. On weekly candlestick charts, we see four consecutive “red” or losing formations, something that didn’t even take place when the market was in freefall mode in September through November.

Much will likely be made the next few days by stock market watchers of the so-called “January Effect,” one interpretation of which holds that the market during the next 11 months takes it cues from what happens in the first month. Like many stats, they can be bent all kinds of ways to further whatever argument you want to make. For me, it’s a debate that is fun but which serves little purpose, because in recent years various iterations of the “January Effect” have been little more reliable than pure chance. There are two key points I’m watching next week: 450 and 427.

Regular readers of this column will know all about 450. It is our key swingline for the ...

Market tension Friday morning was palpable. Even decent earnings reports from some of the big boys such as Google, Inc. (Nasdaq:GOOG) didn’t seem to stem the opening selling tide. Thankfully, the Russell 2000 (NYSE:IWM) was able to generate a recovery rally off the morning trough and put something of a happy face on another difficult week for investors. However, the bounce Friday afternoon off 7-week lows for small-caps was a hollow victory. The market still generated the second lowest close in more than five years on weekly studies and must fight back through 450 quickly next week or risk a deeper slide and potential retest of the November bear-market lows...

Small-cap stocks fell 3% this week, generating downside follow-through on the bearish cloud cover pattern we discussed in last week’s column while solidifying the worrisome reaction to monthly employment numbers. Now that we’ve paid the short-term toll to the ferryman on the previous week’s patterns and price action, we move into a holiday-shortened affair this week with a slight moderation on the immediate pattern study.

The market left a nice bullish reversal pattern Thursday by slipping to short-term move lows, then closing higher. The formation resembled a “hammer” bottom on daily charts and that same formation is even more visible on weekly studies. The question now is whether the breach of 450 this past week was the first body blow to value investors at that level, or a “head fake” slide that served up a buying opportunity?

Thursday’s bullish reversal formation in the Russell 2000 (NYSE:IWM) will hold true as long as 453.25 holds up. Since the pattern was built on daily studies, it’s only worth focusing on for this week’s action. However, as you can see on the attached charts, the hammer on weekly studies sports a similar worrisome breach of a little channel ...

The rule of thumb wisdom for the “January Effect” goes something like this: the stock market tends to rally the first week of the year, with small-caps outperforming large-caps as investors adjust to tax-related selling from the end of the previous year. Most important, there is a follow up theory espoused by many that “as goes January, so goes the year.”

Most market “truisms” are rooted in solid theory. In fact, most of these broad theories usually worked like a charm for a long period of time, hence they grew into fabled status. In the case of the theory that “as goes January, so goes the year” -- well, that just hasn’t been the case for the Russell 2000 (NYSE:IWM). Over the past 15 years, that premise only worked 9 of 15 times, including a run of six straight from 1997-2002. Interestingly, that concept has alternated right and wrong years now for the last seven seasons of trading! If the alternating trend holds up, then small-caps will NOT follow the January trend this time around. Given the ugly start we got off to during the first full week of trading in 2009, maybe that alternating trend is a good thing. As it turned out, this week’s action saw the largest one-week decline in the ...

Small-cap stocks took a sizable hit today and finished off the first full week of the New Year’s trading with a resounding thud as an unsettling report on employment rekindled worries about the recession, consumer spending and the credit crunch. The Russell 2000 (NYSE:IWM) closed down 20.71, or 4.13% at 481.30 and is now down 3.6% for the year, generating the largest one-day drop of 2009 in the process. Selling in small-caps was much more fierce than that seen in the Dow, which was only off 1.6% for the day; for the year, the Dow is down 2%, while the S&P 500 is down 1.4%.

In recent weeks, the market has often tried to rally in the face of troubling economic data, but the bulls just weren’t eager to shrug off this morning’s jobs report, which showed the unemployment rate rising to a 16-year peak. What’s more, unemployment is widely expected to climb in the next couple of months; earlier today, bond giant PIMCO chief Bill Gross said that “we’re only halfway home” as far as job losses are concerned in the U.S.

The headline figure on today’s employment report – the number of non-farm payroll jobs lost ...

Small-cap stocks remained lower into mid-session, pressured by worries over the economy following a dour report on the nation’s employment status. Energy shares and homebuilders were taking a hit today, which added to the bearish tilt. Still, the market bounced off the early lows as investors continue to bet that the worst of the recession news is already priced into the market. At 12:26 p.m. ET, the Russell 2000 (NYSE:IWM) was down 11.79, or 2.35% at 490.22.

Today’s monthly employment release from the Labor Department said that the unemployment rate climbed to 7.2%, the highest level since 1993. Although the jobless rate was above expectations, the 524,000 decline in non-farm payrolls met the consensus forecast and was better than the “whisper” numbers floating about ahead of this morning’s report. Treasury markets turned higher after the news, which suggests the economy fears are still very much in play.

Looking at sector activity so far today, technology stocks, energy firms, banking shares and homebuilders were pacing the declines. Retailers were also taking a hit, with apparel and accessory companies down hard again today. Losers were swamping ...

Small-cap stocks drifted lower, pulled down by concerns over sizable upward revisions in recent employment reports, which countered any upside glee when the headline non-farm figure was below “worst-case” scenarios. The market is now in a position today of working out whether this jobs report is already priced into the market, or reflects a little darker picture than current stock market valuations. At 9:52 a.m. ET, the Russell 2000 (NYSE:IWM) was down 12.03, or 2.46% at 489.68.

The Labor Department report showed that 524,000 non-farm payroll jobs were lost in December, which was in line with the average analyst forecast for a decline of 525,000 jobs. However, “whisper” numbers were upward of 650,000, so the key headline figure on the jobs release was basically better than feared. That said, some of the other details were not pretty. For instance, the unemployment rate climbed to 7.2%, which marked the highest level in 16 years, and which was above the 7.0% consensus projection. It was also the largest year-over-year increase in the unemployment rate since the 1982 recession. What’s more, the Labor Department dramatically revised job loss figures for October and November, adding another ...

U.S. stocks are expected to open near steady levels after a dreary employment report that wasn’t as bad as feared, but which still generated a pullback in the U.S. dollar and a rise in the gold market. Stock index futures saw a modest bounce as non-farm payroll declines were not as bad as the “whisper” numbers. The Dow is expected to open about 20 points higher, while the Russell 2000 (NYSE:IWM) was called up about 0.2%, near 503.00.

The employment report headline figure showed that 524,000 non-farm jobs were lost in December, which was in line with the average analyst guess of 525,000, but well below whisper numbers ranging above 650,000 after the ADP private employment survey earlier this week was at 693,000. The unemployment rate climbed to 7.2%, which was well above the forecast.

In overseas trading, markets in Europe were slightly lower in front of the U.S. employment release, while Asian markets posted moderate losses. South Korea slashed ...

Small-cap stocks pushed higher in a relatively tame session, with morning pressure from concerns about sloppy sales at Wal-Mart countered by optimism for massive infrastructure spending projects in the months ahead. Perhaps the story lines simply balanced out each other, or perhaps the market was taking a little “breather” ahead of Friday’s big jobs report. The Russell 2000 (NYSE:IWM) closed up 4.91, or 0.99% at 502.01 and is now up 0.5% for the year; meanwhile the Dow is off 0.3% for 2009 and the S&P 500 is up 0.7%.

The day started off with a thud as the Wal-Mart worries ignited fears that if consumer spending is slack at discounters, then how bad might it be for higher-end fare? Wal-Mart Stores Inc. (NYSE:WMT) reported same-store sales were up 1.7% in December, which missed the forecast for a rise of 2.8%. WMT was a drag on large-cap index products throughout the day, and eventually lost more than 7%.

There actually was plenty of movement today in the retail arena, with most stores now coming out with monthly same-store results. However, for every Wal-Mart, Limited Brands Inc. (NYSE:LTD) and Abercrombie & Fitch Co. (NYSE:ANF), all of which fell on weak numbers, there was a Sears Holdings Corp. (Nasdaq:SHLD), which jumped 23%. If you owned stock in any retailers, chances are you experienced ...

Small-cap stocks hovered near steady levels into mid-session trading, up from the morning lows amid optimism over the fiscal stimulus plans that were put into greater detail today by President-elect Obama. The stimulus cheer helped offset gloom over sloppy retail sales from discount giant Wal-Mart, which put an early pall on the morning activity. At 12:23 p.m. ET, the Russell 2000 (NYSE:IWM) was up 0.27, or 0.05% at 497.36, outperforming the Dow and S&P 500.

Wal-Mart’s same-store sales were up in December, but short of expectations, which rekindled worries about consumer spending in the recession. Wal-Mart Stores Inc. (NYSE:WMT) was one of the few bright spots during 2008, but if discounters start to struggle, does that mean rising unemployment is forcing consumers to close their wallets altogether right now?

Speaking of unemployment, today’s weekly claims data served up a bullish surprise for the second consecutive week, with the headline figure coming in at 467,000, some 75,000 below the forecast. However, continuing claims were at 26-year highs, which took some of the bullish edge off the number. The market is still bracing for a potential ...

Small-cap stocks pushed lower this morning, pulled down by renewed worries about consumer spending after the world’s largest retailer posted disappointing December sales. In addition, tech stocks and commodities were on the defensive this morning following losses in overseas trading. At 9:57 a.m. ET, the Russell 2000 (NYSE:IWM) was down 3.82, or 0.77% at 493.28.

Wal-Mart Stores Inc. (NYSE:WMT) reported December same-store sales were up just 1.7%, which was below the projection for a rise of 2.8%. Still, this was a rare increase in sales when many retailers were actually down for the month. Wal-Mart officials also lowered fourth-quarter earnings projections, a familiar trend early this New Year. WMT shares were off about 8% in early trading.

Investors got another glimpse of employment data this morning ahead of Friday’s key monthly jobs report. The weekly unemployment claims release came out at 467,000 which was quite a bit better than feared. The forecast called for about 540,000 ...

U.S. stocks are expected to open solidly lower, pressured by a profit-warning and soft December sales from discount retailer Wal-Mart Stores Inc. (NYSE:WMT) and by losses in Europe and Asia. The slide in Asia wiped out initial 2009 gains, with the overall market off more than 3% as bank, energy, chip and pc maker shares were in retreat mode. Crude oil stabilized after Wednesday’s 12% hit, but other commodities were down, which could weigh on companies involved in mining and other raw goods businesses. The Dow was expected to open down 100 points, while the Russell 2000 (NYSE:IWM) was seen down 0.8%, near 493.00.

The weekly unemployment claims report came in at 467,000, which was quite a bit better than the forecast for 540,000. However, continuing claims rose to 4.6 million, the highest since November 1982.

In overseas trading, European markets were down even in the face of another rate ...

Small-cap stocks got hammered today as worries about the economy amid rising unemployment and fresh profit warnings in the technology sector sparked a wave of selling. The Russell 2000 (NYSE:IWM) notched the best performance of the year Tuesday and followed it up with the worst performance in quick order, losing 17.61, or 3.42% to 497.10. The Russell also slipped into negative territory for the first time this year, and is now off 0.5%, while the Dow is down 0.1% and the S&P 500 is up 0.4%.

There really was no safe port in today’s storm. Usually when stocks are getting whacked you will see money flow into credit markets, or get parked in gold, or maybe find a home in energy or some other commodity goods market. But today, equities were lower, Treasuries were lower, the dollar was lower, crude oil was lower, grains were lower, and gold was lower; heck, even livestock futures were slaughtered today. Just four trading days into the New Year, everyone got a harsh reminder that an economy in recession with credit yields near record lows is not a pleasant position for investors or businesses.

Bears woke up with a roar this morning as the ADP National Employment Report ...

Small-cap stocks remained sharply lower into mid-session, but were up from the extreme morning lows. Losses were stirred by worries over the economy, a revenue warning from key tech player Intel Corp and news of a big fraud from a major Indian outsourcing firm. At 12:33 p.m. ET, the Russell 2000 (NYSE:IWM) was down 11.90, or 2.31% at 502.81.

President-elect Obama addressed several issues at mid-morning, ranging from the Middle East situation to the economy. He said that his stimulus plan will likely be at the high end of expectations, which likely helped pull stocks off the morning lows. Equities markets in the United States and even around the world have embraced talk of a major infrastructure spending plan forwarded by Obama. Obama said that he will deliver a major speech on the economy and the stimulus package on Thursday. He is slated to take over as President on January 20.

Ahead of the opening today, the ADP National Employment Survey reported that 693,000 private sector jobs were lost in December, which was a record high for the ADP report (the data base started in 2001). That figure was way above the consensus ...

Small-cap stocks went into a tailspin in early trading, pulled down by a gloomy report on the jobs front ahead of Friday’s key employment release. In addition, some big companies announced plans to slash workers or cautioned on the outlook, which sent a chill into a market that started out the year on a decent roll. At 9:59 a.m. ET, the Russell 2000 (NYSE:IWM) was off 9.96, or 1.93% at 504.75.

The big scare this morning came from the ADP National Employment survey, which showed that the private sector lost a stunning 693,000 jobs in December, way above the 476,000 lost in November and also well clear of the forecast for a decline of 480,000. This marked the largest decline since the ADP report was started back in 2001. The methodology for this report was tweaked, which could take some edge off the big decline in jobs, but the market clearly was stressed by the report. The ADP data also will heighten concerns about the employment picture ahead of Friday’s big ...

U.S. stocks are expected to open lower, pulled down by declines in Europe where mining, bank and energy stocks were on the defensive. In addition, a private employment survey this morning came in weaker-than-expected, which could heighten worries about the big jobs report coming up Friday. The Dow is expected to open about 125 points lower, while the Russell 2000 (NYSE:IWM) is seen down about 1.2% near 508.50.

The ADP National Employment Report showed a startling drop in jobs of 693,000, way above the forecast for a decline of 480,000. The initial response to the report was a drop in stock index futures and a bounce in credit markets.

Crude oil prices slipped from flat levels to a loss of about $0.70 a barrel on news that ...

Small-cap stocks turned in their best performance of the New Year today, as investors decided that a dreary picture of the current economic environment would simply make it that much easier for incoming President-elect Obama to push through a big fiscal stimulus package. The Russell 2000 (NYSE:IWM) closed up 9.68, or 1.92% at 514.71, the highest daily finish since November 4. For the first three days of trading in 2009, the Russell is up 3.1%, while the Dow is up 2.7% and the S&P 500 is up 3.5%.

In what promises to be a very busy week on the economic data front, the market skipped merrily through several gloomy reports today, with services sector activity, pending home sales and factory orders all consistent with an economy mired deep in recession. Even when a report beats the forecast, as was the case with today’s ISM Non-Manufacturing report on services sector activity, it’s still a low number historically. For the record, the ISM report came in at 40.6, well above the consensus projection of 37.0 and a nice turn of events considering the ISM’s tally on manufacturing Friday reflected a 28-year low.

Elsewhere on the data front, factory orders came in down 4.6%, which was quite a bit ...

Small-cap stocks remained higher into midday trading, surviving a choppy response to economic data this morning that served up better-than-expected numbers on services sector activity, but slumping factory orders and sinking pending home sales. The market now can calm for a an hour or so, waiting for the FOMC minutes, which will be released at 2:00 p.m. ET. At 12:26 a.m. ET, the Russell 2000 (NYSE:IWM) was up 6.15, or 1.2% at 511.18, outpacing more modest gains in the Dow and S&P 500.

Homebuilder, energy and retailer stocks were solid performers so far today, and surprisingly, airline stocks were doing well despite a rise to five-week highs in crude oil prices. Energy futures did peel back off the morning peak, which may have served up a little relief for companies with large exposure to energy price risk. There was also some thinking that when crude oil seemingly failed above $50 dollars today that was a positive signal that even the geopolitical tension in Israel and the gas dispute in Russia weren’t enough to stoke a major explosion right now.

Looking at sector activity so far today, the best performers were health care facilities, industrial real estate investment trusts, metal and mining stocks, internet retailers, semiconductors, life insurers, coal and automobile manufacturers. Speaking of ...

Small-cap stocks pulled higher this morning and remained in positive ground after a mixed batch of economic reports buffeted the market. A firm tone in energy stocks, momentum from overseas gains and optimism about upcoming stimulus plans provided a lift. At 10:04 a.m. ET, the Russell 2000 (NYSE:IWM) was up 8.51, or 1.68% at 513.54.

The ISM Non-Manufacturing Survey came in at 40.6, which was better than the forecast of 37.0 and a nice bounce off record lows from the previous reading. Still, this number is low historically and consistent with recession. Although the ISM reading was positive relative to expectations, the same can’t be said for factory orders, which tumbled 4.6%, much worse than the projection for a decline of 2.5%. Completing the early data trifecta, pending home sales were also sour, sinking 4.0% versus the consensus for a decline of 1.0%. Now that this rush of economic data is out of the way, the market should be free to focus on other factors before this afternoon’s 2:00 p.m. ET release of FOMC minutes.

Crude oil prices pulled back above $50 dollars a barrel for the first time in some ...

U.S. stocks are expected to open higher Tuesday, underpinned by gains in Europe, where retail and mining stocks were strong performers. A host of economic data later this morning could spark volatility, as could the afternoon release of FOMC minutes. Crude oil prices climbed to a five-week high overnight, which could bolster energy stocks, one of the top performing sectors during Monday’s session. The Dow is called 80 points higher, while the Russell 2000 (NYSE:IWM) is seen opening about 0.7% higher near 508.50.

Crude oil prices climbed back above $50 dollars a barrel in European trading as tension in the Middle East and a dispute over gas between Russia and Ukraine continue to spark a risk bid into energy prices, which were already beaten down drastically from last summer’s peak. The rally in energy prices continues to fly in the face of a strong dollar, which soared another 2% against the euro during European trading. The strong greenback took the edge off gold prices Monday and the yellow metal was lower again overnight; despite the slide in gold, industrial metals remain firm, providing a lift to mining stocks overseas.

Although Asian equity markets were basically flat overnight, chipmakers were solid ...

Small-cap stocks started out the first full week of 2009’s trading in choppy, bifurcated fashion, with support from energy and homebuilding stocks countered by selling in banking, financial, gold, telecom and drug shares. The Russell 2000 (NYSE:IWM) closed down 0.82, or 0.16% at 505.03, and is now up 1.1% for the New Year, compared with a gain of 2.0% for the Dow and 2.7% for the S&P 500.

The day looked to start out with a bullish bias amid gains in overseas trading tied to optimism over incoming President-elect Obama’s stimulus plans. Officials said this weekend that the measures could include $310 billion in tax cuts, an idea that was embraced by overseas investors – especially in those companies with strong sales to U.S. customers. However, the market has already had a few “Obamanomics” rallies in recent weeks and didn’t seem inclined to run with this latest information.

Telecom and banking shares were both bruised by analyst downgrades in the respective sectors. Dow component JP Morgan Chase and Co. (NYSE:JPM) was one ...

Small-cap stocks climbed back from a morning slide, and made a secondary run at positive territory before gravitating slightly lower at mid-session as a rally in energy and homebuilder stocks was offset by losses in financial and airline shares. At 1:01 p.m. ET, the Russell 2000 (NYSE:IWM) was down 1.40, or 0.24% at 504.63.

Looking at sector activity so far today, the top performers were coal, metal and mining stocks, office electronics, wireless telecoms, automobile manufacturers, casinos, oil exploration, oil production, oil refiners, homebuilders and gas utilities. On the downside, real estate services, diversified banks, airlines, gold, satellite firms and regional banks were among the worst performers.

Crude oil prices rose to a three-week high earlier today and even though prices edged off that intraday peak the market retained a bid as Israeli forces continued the assault on the Gaza Strip and amid a dispute between Russia and Ukraine on gas supplies. Energy stocks were a primary upside force today for equities, with the Energy Select Sector SPDR Fund up 2.1% at midday.

Even though several commodity groups (like coal and mining shares) were doing well today, commodities in general were basically flat, with the Commodity Research Bureau Index up just 0.17%. Some pressure on commodities was likely stirred by a rally in the dollar, which was up a whopping 2.4% versus the euro. Many commodity markets are priced in dollar terms, so a rise in the greenback can stunt demand for physical goods. One market apparently feeling that pinch was gold, which slumped 3% and pulled down gold stocks.

Homebuilder stocks were making a solid upside push today, likely supported by news ...

Small-cap stocks edged lower this morning, pulled down by ideas Friday’s gains were overdone, by ongoing worries about the credit crisis and the economic recession and by a batch of soft earnings announcements in the small-cap sphere this morning. Losses were limited by optimism about fiscal stimulus plans when President-elect Obama takes office later this month. At 9:56 a.m. ET, the Russell 2000 (NYSE:IWM) was down 9.82, or 1.94% at 496.03.

Over the weekend, Obama officials said that the stimulus plan could include some $310 billion in tax cuts, which could lessen the Republican resistance to the spending programs. Overseas markets were glad to hear the news, with Asian equities rallying. Federal Reserve officials also were extolling the benefit of a stimulus program in weekend talks, further driving home the point.

There was some concern that Friday’s big rise was perhaps a little premature, as noted in comments this morning from analysts at Goldman Sachs. “Friday's initial 2009 trading session saw global equity markets rally notably (around 3%). There was no obvious macroeconomic catalyst for the move, other than talk about a very large fiscal expansion. In fact, the macro news was clearly weak, as the ISM survey dropped much more than expected to 32.4. Technical factors, including year-end related flows, likely played a role, and it will be interesting to watch for any ...

U.S. stocks are expected to open lower, pulled down by profit-taking from Friday’s rise despite gains in European and Asian trading. Overseas companies with large revenue ties to American customers were solid performers overnight following talk that President-elect Obama’s plan will include some $300 billion in tax cuts. The Dow is expected to open about 70 points lower, while the Russell 2000 (NYSE:IWM) is seen down 0.6% near 502.75.

Over the weekend, two Federal Reserve officials talked up the role of aggressive fiscal stimulus, which ramped up enthusiasm about the incoming administration’s plans to spark recovery through spending programs.

Copper and zinc futures markets were limit up in China trading amid hopes that re-indexing of commodity funds will boost industrial metals. Mining shares were firm overnight and remain a sector to watch in U.S. trading today. Within the commodity theme, crude oil prices slipped into negative territory ahead of the U.S. open, giving back decent overnight gains amid geopolitical tensions.

In overseas action, European markets rose more than 1%, while Asia ...

In last year’s annual recap/outlook column, I fretted that the chart pattern resembled the topping formation we saw back at the end of 2000. Now that we have played out one of the most painful bear market collapses in market history, we come into 2009 with three intriguing scenarios: Will the market sink into a 1930s style depression environment? Will we see a chart pattern remake of the 1958 recovery surge? Or, will we move into an extended 1970s-style trading environment?

From a strict charting standpoint, the 2007 year-end formation was actually a much more interesting and dynamic pattern than what we see at the end of 2008. The doji-style top in 2007 made for a reasonably powerful warning signal about 2008. This year, the market simply shows a runaway bearish continuation pattern. Instead of turning points, these types of patterns typically become more about tracking the progress of support and resistance zones, and testing retracement lines to provide clues about the end of the bear market cycle.

Before we dig into the heart of this year’s annual chart study, there are a couple of “style” points to note. First, you’ll see that most of my historical reference utilizes the Dow; simply put, the Russell 2000 didn’t exist 80 years ago. Also, on the charts that accompany this column, you’ll see that I have broken down the Dow charts into various shorter time frames; if I ran all the data together, the charts lose perspective because of the massive appreciation in the Dow price series over the last 25 years. It’s quite interesting to see the various yearly patterns on their own merit. I have also...

Small-cap stocks rang in the first day of trading in 2009 with a solid, albeit light-volume advance, fueled by steep gains in energy shares, and an impressive showing from retail and technology stocks. The Russell 2000 (NYSE:IWM) gained 6.37, or 1.27% to 505.82, the highest daily close since November 5.

The Dow was up 2.94% on the day, while the S&P 500 was up 3.16%, so the big-cap outperformance was a little bit of a sign that the market is still in a wary frame of mind, especially with a January seasonal that tends to favor small-cap stocks.

Small-Cap Winners:

• Wausau Paper Corp. (NYSE:WPP) and Life Partners Holdings Inc (Nasdaq:LPHI) were among the companies with market caps between $100 million and $2 billion that established 52-week highs in today's session.
• Twelve-month highs were also set in Transmeta Corp. (Nasdaq:TMTA), Cantel Medical Corp. (NYSE:CMN), NCI, Inc. (Nasdaq:NCIT) and Force Protection, Inc. (Nasdaq:FRPT).

 

• DryShips is today's most active small cap, with nearly 20 million shares having changed hands so far. That's three times more than the next most active small cap, Silver Wheaton Corp. See (DRYS, SLW)   Jan 02, 2009 2:11pm
• Atlas Pipeline Partners, which lost more than 84% in 2008, is up 26.2% today at $7.57. (See APL)   Jan 02, 2009 1:52pm
• 012 Smile.Communications Ltd is 28% higher at $5.10. Smile provides a range of broadband and traditional voice services in Israel. (See SMLC)   Jan 02, 2009 1:47pm
• Houston, Texas-based Integrated Electrical Services, Inc. is up 29% to $11.30. (See IESC)   Jan 02, 2009 1:45pm
• Coal producer Walter Industries is up 7.5% to $18.83 after it said late Wed it will expand its share repurchase program by $50 million. (See WLT)   Jan 02, 2009 9:45am
• Oshkosh Corp is up 5% to $6.48 after news late Wed it won a $1.1 billion Pentagon truck deal. (See OSK)   Jan 02, 2009 9:39am

Small-Cap Losers:

• Optimer Pharmaceuticals, Inc. is down 10% to $10.91 after establishing a 52-week high in Wednesday's session. (See OPTR)   Jan 02, 2009 2:30pm
• Sprint Nextel wireless affiliate iPCS Inc is one of the day's biggest small cap losers, down nearly 11% at $6.11. (See IPCS)   Jan 02, 2009 2:26pm
• Deutsche Bank downgraded hospital operator MedCath Corp. to "Hold" from "Buy." Shares were down 6.5% to $9.76. (See MDTH)   Jan 02, 2009 9:51am

Small-cap stocks rang in the first day of trading in 2009 with a solid, albeit light-volume advance, fueled by steep gains in energy shares, and an impressive showing from retail and technology stocks. The Russell 2000 (NYSE:IWM) gained 6.37, or 1.27% to 505.82, the highest daily close since November 5.

The Dow was up 2.94% on the day, while the S&P 500 was up 3.16%, so the big-cap outperformance was a little bit of a sign that the market is still in a wary frame of mind, especially with a January seasonal that tends to favor small-cap stocks. That said, there were no new 52-week lows on small-cap stocks with market caps between $100 million and $2 billion, which is fairly unusual.

Energy stocks hit the ground running this year, with the Energy Select Sector SPDR Fund soaring nearly 6%. Crude oil prices were up 3.9%, rising $1.74 dollar a barrel to $46.34, which was a big reversal of fortune from a $2-dollar slide in European trading overnight. Violence in the Gaza Strip and tension between Russia and Ukraine were supportive elements in play on the cash crude side of things.

In addition to energy, other commodity themes were attractive plays for investors ...

Wausau Paper Corp. (NYSE:WPP) and Life Partners Holdings Inc (Nasdaq:LPHI) were among the companies with market caps between $100 million and $2 billion that established 52-week highs in today's session.

Twelve-month highs were also set in Transmeta Corp. (Nasdaq:TMTA), Cantel Medical Corp. (NYSE:CMN), NCI, Inc. (Nasdaq:NCIT) and Force Protection, Inc. (Nasdaq:FRPT).

There were no new 52-week lows among companies with market capitalizations between $100 million and $2 billion in Friday's session.