July Durables Flip Double Dip Expectations the Middle Finger
The market blasted higher yesterday. Volume soared as the indices climbed over 3% in a persistent rise. The accumulation was great as technology led the charge higher. Additionally, the indices were able to put in a big day without the help of a falling dollar which was a positive sign of market strength.
Yesterday I wrote about how the bulls needed a big day and also how I thought the bulls were going to get it. The SPX was near a sturdy support zone, and a bottoming pattern was in place. All the bulls needed to do was pump the market higher and then SPX would be on its way to 1197.
Global Crossing, Inter Parfums and American Woodmark lead small-cap percentage losers
Also included among the results: WNS Holdings Ltd. (Nasdaq:WNS), Barnes Group Inc. (Nasdaq:B), USANA Health Sciences Inc. (Nasdaq:USNA), AnnTaylor Stores Corp. (Nasdaq:ANN), Tollgrade Communications Inc. (Nasdaq:TLGD) and NACCO Industries Inc. (Nasdaq:NC).
Stocks tumble at closing; VTIV, GLBC and LL lead gainers
Stocks tumbled yet again today, with the Russell 2000 (NYSE:IWM) closing down 3.65%, losing nearly 10% in the first two days after the U.S. presidential election. Today’s small-cap gainers are inVentive Health (Nasdaq:VTIV), Global Crossing (Nasdaq:GLBC) and Lumber Liquidators (NYSE:LL).
Other Market Watch highlights today included:
• For the year, the Russell is now off 35%, while the Dow is down 34% and the S&P 500 is down 38%.
• Goldman Sachs is predicting that a jolting 300,000 people lost their jobs last month (the consensus forecast is minus 180,000). Goldman also is looking for the unemployment rate to jump to 6.4%, up 0.3% from last month.
• Monthly confidence survey today among corporate CEOs read that 66% of CEOs expect employment to fall in coming months.
• Among S&P sector groups, only homebuilders managed a 1% rise, but there were 10 sectors generating declines greater than 10%.
• Commodities got hammered today, with copper slumping 5%.
• Crude oil fell to 19-month lows yet airline stocks stayed negative; when those two trade in tandem, recession is dominating psychology.
• Energy stocks were a major drag on the market, with the Energy Select Sector SPDR Fund sinking nearly 7%.
Small Cap Gainers:
• inVentive Health Inc. jumped 38% as the provider of commercialization services to pharmaceutical and health care firms reported a jump in third-quarter revenues. See (Nasdaq:VTIV).
• Global Crossing Ltd. rallied 19% as the IP solutions provider also got an earnings-related lift. See (Nasdaq:GLBC).
• Lumber Liquidators' income rose 48% in Q3; shares closed up 18.8%. See (NYSE:LL).
• Simcere Pharmaceutical Group reports rise in Q3 profit, reaffirms FY08 . . .
Recession worries, soft retail sales set somber tone into jobs report
Small-cap stocks fell hard today as recession fears and sloppy retail sales kept the market on the defensive ahead of Friday’s big employment report. The Russell 2000 (NYSE:IWM) shed 18.79, or 3.65% to 495.84, losing nearly 10% in the first two days after the U.S. presidential election. For the year, the Russell is now off 35%, while the Dow is down 34% and the S&P 500 is down 38%.
The market was already reeling overnight when tech bellwether Cisco Systems Inc. (Nasdaq:CSCO) beat the earnings forecast but warned that revenues could fall hard quickly. As the day progressed, Cisco remained under pressure, but tended to outperform the indices. The bulls got a brief reprieve this morning when European bankers slashed interest rates, but the lift from that news didn’t have much shelf-life for U.S. equities.
Of course, it didn’t help matters that yet another economic report reflected a gloomy situation on the employment front — especially a day ahead of the Labor Department monthly reading on payrolls. After awful data earlier this week on manufacturing and service sector activity, this week’s unemployment claims came in above expectations, but the most sobering statistic was that continuing claims rose 122,000 to 3.84 million, the highest level in more than 25 years. A rush of dreadful economic data in recent days sets the stage for the “Grandaddy of Data” (yeah, Friday’s jobs report) to extend the glum reading of the nation’s economic picture. Esteemed researchers at Goldman Sachs already lowered their previous forecast for Friday’s non-farm payrolls — they are now predicting that a jolting 300,000 people lost their jobs last month (the consensus forecast is minus 180,000). Goldman also is looking for the unemployment rate to jump to 6.4%, up 0.3% from last month.
And just to reinforce the recession worries, same-store retail sales numbers came flooding in today; although there were some companies that did well, the cumulative total slumped to the worst monthly reading in about a decade as we head toward the crucial holiday spending period. A monthly confidence survey among corporate CEOs slumped to a record low when it was published this afternoon. The . . .
Small-cap stocks extend the morning slide; LL, GCA, and AEL lead gainers
Other Market Watch highlights today included:
• Thomson-Reuters October same-store sales index was off 0.7%, and they pegged today’s retail returns as the worst monthly results in a decade.
• Energy exporters that depend on demand from big consumers were taking a beating, with the Energy Select Sector SPDR Fund down 5.5%.
• The IMF said that developed economies were on track for a full-year contraction for the first time since World War II.
• The malaise continued to bruise commodity markets, with crude oil prices tumbling toward $60 a barrel, or the lowest prices since March.
• The Russell 2000 is down 2% in midday trading.
Small Cap Gainers:
• Lumber Liquidators' income up 48% in Q3; shares soar 18%. See (NYSE:LL).
• Global Cash Access Holdings reports successful Q3 results; shares climb 25%. See (NYSE:GCA).
• American Equity's Q3 2008 operating income increases 41%; shares pop over 33%. See (NYSE:AEL).
• Global Crossing Ltd. rallied 19% as the IP solutions provider also got an earnings-related lift. See (Nasdaq:GLBC).
• Simcere Pharmaceutical Group reports rise in Q3 profit, reaffirms FY08guidance. Shares up 18%. See (NYSE:SCR).
Small Cap Losers:
• LandAmerica dives 33% on delayed third-quarter earnings. See (NYSE:LFG).
• Georgia Gulf Corporation slips to loss in Q3; shares down 28%. See (NYSE:GGC).
• SRA International down 26% on Cowen & Co. downgrade. See (NYSE:SRX).
• Playboy Enterprises sees sharp ad sales drop, shares tumble 22%. See (NYSE:PLA).
No safe place for bulls to hide today
Small-cap stocks extended the morning slide into midday trading, as pressure from a weak economy continues to take a toll on commodity, retail and financial stocks, overshadowing even aggressive rate cuts out of Europe overnight. At 12:04 p.m. ET, the Russell 2000 (NYSE:IWM) was down 10.28, or 2%, at 504.36.
There really was no safe place to park money today, with equities taking a big hit, Treasury products lower and even commodities in negative territory. The Brazilian president said that the worst of the global financial crisis has now passed, but the market didn’t seem to heed his remarks, with the Brazilian stock market sinking some 3.5% into their afternoon trading time frame. Brazil is a major commodities exporter, and has taken an extra hit as commodity prices collapsed along with stocks in recent weeks.
The economic malaise continued to bruise commodity markets, with crude oil prices tumbling toward $60 a barrel, or the lowest prices since March. The IMF said that developed economies were on track for a full-year contraction for the first time since World War II, and energy exporters that depend on demand from big consumers were taking a beating, with the Energy Select Sector SPDR Fund down 5.5%.
Here in the United States a weak tone for the day was forged overnight when tech bellwether Cisco Systems Inc. (Nasdaq:CSCO) beat the earnings forecast for the third quarter but warned that fourth quarter revenue could decline for the first time in years. CSCO was down about 2.2%, but now actually lagging overall declines in the Nasdaq 100 and in the Dow and S&P 500, so clearly there were other problems bigger than just CSCO.
Retailer shares were a mixed bag today as monthly same-store sales results were pouring in. However, the overall read was gloomy, with the S&P Retail Index down about 1.7%. While there were individual bright spots like small-cap firm Hot Topic Inc. (Nasdaq:HOTT), which was up 12% as sales climbed 8.3%, there were also plenty of disappointments such as Ann Taylor Stores Corp. (NYSE:ANN), which tumbled 25% as the women’s apparel specialist said it would slash jobs and cut costs . . .
inVentiv Health, Global Crossing and Lumber Liquidators lead small-cap percentage gainers
Also included among the results: Capella Education Co. (Nasdaq:CPLA), CastlePoint Holdings Ltd. (Nasdaq:CPHL), RGC Resources Inc. (Nasdaq:RGCO), American Apparel Inc. (Nasdaq:APP), Simcere Pharmaceutical Group (Nasdaq:SCR) and Volcano Corp. (Nasdaq:VOLC).
Here are the biggest percentage gainers among small caps:
Small-cap stocks open low; VTIV, GLBC, and COBK lead gainers
Other Market Watch highlights today included:
• The latest batch of monthly same-store sales reports are coming out could influence the retail sector in general throughout the day.
• The sobering weekly claims report that was released today shows that Americans aren’t just losing jobs, they are struggling to find new ones too.
• At 9:51 a.m. ET, the Russell 2000 (NYSE:IWM) was down 0.74, or 3.83%, at 510.81.
• The Bank of England stunned the market with a very aggressive rate cut of 150 basis points, pushing benchmark rates there to the lowest point in 53 years.
• The most numbing stat from this morning’s data was that the number of continuing claims rose 122,000 last week to 3.84 million, the highest level in more than 25 years.
Small Cap Gainers:
• inVentiv Health Q3 profit declines; reaffirms FY08 revenue guidance. Shares are soaring 43%. See (Nasdaq:VTIV).
• Shares of Global Crossing up over 18% as the company maintains outlook, sees Q3 sales rise 12%. See (Nasdaq:GLBC).
• Colonial Bankshares up 18% on higher-than-average volume. See (Nasdaq:COBK).
• H&E Equipment Services Inc. jumped 14% on solid earnings news. See (Nasdaq:HEES).
• Small-cap retailer Hot Topic reported same-stores sales rose 8.3% and raised guidance. Shares were up 8.6% this morning. See (Nasdaq:HOTT).
Small Cap Losers:
• Lakes Entertainment Inc. slumped 29%, plunging a day after earnings and also as a casino referendum in Ohio was defeated. See (Nasdaq:LACO).
• Entertainment software company THQ posts big 2Q loss, plans 250 layoffs. Shares down 25% in pre-market. See (Nasdaq:THQI).
• Shares of Citi Trends down 9% in pre-market after the company announces Q3 sales. See (Nasdaq:CTRN).
• Abercrombie & Fitch's Oct. comparable store sales decline 20%; shares trade over 7% lower in pre-market. See (NYSE:ANF).
Stereotaxis with new tech development
“Odyssey” is a new product that consolidates multiple information sources and screens within an electrophysiology interventional lab into a single visual display, Stereotaxis said before the opening bell.
