MDS, Medicines and Imergent lead small-cap percentage gainers
Also included among the results: Computer Task Group Inc. (Nasdaq:CTGX), LCA Vision Inc. (Nasdaq:LCAV), DrdGold ADR (Nasdaq:DROOY), Gammon Gold Inc. (Nasdaq:GRS), CardioNet Inc. (Nasdaq:BEAT) and NetGear Inc. (Nasdaq:NTGR).
Matrixx Initiatives, Reddy Ice Holdings and LCA Vision lead small-cap percentage gainers
Also included among the results: Alaska Air Group Inc. (Nasdaq:ALK), Sangamo Biosciences Inc. (Nasdaq:SGMO), Perry Ellis International Inc. (Nasdaq:PERY), SmartHeat Inc. (Nasdaq:HEAT), Media General Inc. (Nasdaq:MEG) and Aristotle Corp. (Nasdaq:ARTL).
Pantry, Gainsco and First Mercury Financial lead small-cap percentage losers
Also included among the results: FFD Financial Corp. (Nasdaq:FFDF), Innophos Holdings Inc. (Nasdaq:IPHS), Life Partners Holdings Inc. (Nasdaq:LPHI), LCA Vision Inc. (Nasdaq:LCAV), WNS Holdings Ltd (Nasdaq:WNS) and Altra Holdings Inc. (Nasdaq:AIMC).
Oncothyreon, LCA Vision and Valassis Communications lead small-cap percentage gainers
Also included among the results: AirMedia Group Inc. (Nasdaq:AMCN), Gainsco Inc. (Nasdaq:GAN), Telestone Technologies Corp. (Nasdaq:TSTC), 3SBio Inc. (Nasdaq:SSRX), Park-Ohio Holdings Corp. (Nasdaq:PKOH) and General Steel Holdings Inc. (Nasdaq:GSI).
SQNM, SPRD, SAY, and MOV Lead Small Cap Trading
As of press time, 4:00 P.M. Eastern, stocks on the broader indices were up. The Dow was down 2.49 points to 8,762, the Nasdaq up 17.73 points to 1,860.13, and the S&P 500 was up 3.22 points to 942.42.
The Russell 2000, the index tracking the 2,000 largest small cap stocks, was up 4.02 points, or 0.77%, to 528.57.
Leading today's small cap gainers was Sequenom (Nasdaq:SQNM) up 45.97%. Sequenom provides genetic analysis products for biomedical research, molecular medicine, and non-invasive prenatal testing. As I've been saying for the past couple weeks, the sector rotation to defensive stocks like biotech and healthcare has started.
Other small caps showing leadership today include Spreadtrum Communications (Nasdaq:SPRD) up 23.76%; Satyam Computer Services (NYSE:SAY) up 34.93% on surprising the market with profits from the December quarter; Movado Group (NYSE:MOV) up 25.8%; and American Axle & Manufacturing (NYSE:AXL) up 22.45% after having broken through it's 200 day moving average for the second time since over a year ago and despite reporting that it will encounter production shutdowns due to the bankruptcy proceedings of General Motors (OTC:GMGMQ.PK) and Chrysler.
Showing the wrong kind of leadership in today's session-that is, the biggest decliner-was youth fashion creator Quiksilver (NYSE:ZQK) shedding 20.17% off it's opening price to be at $2.88 at press time. Shares dropped precipitously after it was announced that Quiksilver's profit was a penny shy of analysts' estimates.
Other stocks with investors seeing red today include LCA-Vision (Nasdaq:LCAV), provider of LasikPlus, down 14.11%; famed golf equipment maker Callaway Golf (NYSE:ELY) down 15.8% on news of it's dividend cut from 7 cents per share to just one cent per share; CBL & Associates Properties (NYSE:CBL) down 12.8% after releasing its full year outlook below consensus expectations and announcing an offering of 50 million shares of common stock.
*****Bravo. The government's handling of the financial crisis and recovery should be recognized as a masterful performance. At least, so long as you don't look too deeply into the numbers…
Bernanke and Co. have managed to restore confidence to the point that economist Paul Krugman has joined the ranks of those who think we are only a couple months away from actual GDP growth.
And they've accomplished this remarkable feat by stringing investors along with one carrot after another…
*****The first carrot was bailouts and stimulus packages. There was a time when stimulus spending was going to save or create 3.5 million jobs. Now, states are wondering where the stimulus money is. And the president is now promising 600,000 jobs will be created by stimulus spending.
But layoffs have slowed considerably according to the most recent non-farm payroll report. And Americans, feeling more secure in their jobs, may not notice that stimulus jobs won't be there, even if they need them.
*****The Public-Private Investment Program (PPIP) was supposed to remove toxic assets from bank balance sheets. Never mind that the banks probably never had any intention of selling at fire-sale prices and investors weren't thrilled with paying unreasonable prices, no matter how much of the transaction would be funded by the Treasury.
Geithner's "stress tests" resulted in banks raising their capital bases. That has helped remove the incentive to dump those toxic assets.
And as for the $74 billion banks have raised so far, do not misunderstand all the talk of "green shoots". These green shoots were not economic recovery per se. Rather, the green shoots were the banks stock prices shooting higher after accounting rule changes allowed them to show a profit where there was none.
In other words, the economic recovery is something akin to an illusion -- those inflated stock prices have allowed the banks to raise enough capital to appear healthy and last a little while longer…
*****Now that investors have breathed a sigh of relief that the problems with the auto industry are being resolved, the Chrysler sale to Fiat has been put on hold. Funny, I would swear a couple weeks ago, Chrysler would go bankrupt and millions would lose their job if Fiat didn't buy Chrysler right away.
*****And then there's TARP - the $700 billion boondoggle. Some banks have been asking to repay the money for months. But ever-sensitive to the all-important timing element of a good comedy, the Treasury has been unwilling to accept payment.
After all, why spoil the party by letting all the good news out at once? Why not wait until the rally is looking weak to release the news that, hey, maybe we'll accept TARP repayments after all? And maybe those payments will be more than anyone expects?
But let's make sure we string the announcement out as long as possible and let the threat of good news keep the bears at bay…
*****Of course, you can only fool all of the people for a while. Eventually, without a real pickup in economic activity, the millions of Americans who are barely keeping their head above water will sink. And then all the issues the "stress tests" glossed over (higher unemployment, rising foreclosure rate, etc.) will cripple the banks once again.
As economist Joseph Stiglitz of Columbia University recently told Bloomberg: "There's a chance that it might work...If it does, then they'll look like the brilliant general. But all these efforts also bank on the economy recovering and housing prices not falling too much further. Those are not safe assumptions."
P.S. I normally don't like to be the guy who says "I told you so", but for today I will. Back when the PPIP was first floated by the Treasury my diligent research in my Top Stock Insights advisory service spotted three stocks that would profit big time if the PPIP went through and profit modestly even if it did not. We did it. In a matter of weeks - not months or years - we profited on Legg Mason (NYSE:LM) for 8.16%, BlackRock (NYSE:BLK) for 9.1%, and AllianceBernstein (NYSE:AB) for 12.77%. Top Stock Insights readers booked these gains DESPITE the collapse of Geithner's PPIP plan. To find out how you can see steady and consistent gains no matter what happens, check out Top Stock Insights at http://www.topstockinsights.com/.
Exide Technologies, Cascade and First Community Bancshares lead small-cap percentage losers
Also included among the results: LCA Vision Inc. (Nasdaq:LCAV), Union Drilling Inc. (Nasdaq:UDRL), Heritage Crystal Clean Inc. (Nasdaq:HCCI), Central Pacific Financial Corp. (Nasdaq:CPF), Volcom Inc. (Nasdaq:VLCM) and Western Refining Inc. (Nasdaq:WNR).
Stewardship Financial, Compass Diversified Holdings and American Caresource Holdings lead small-cap percentage losers
Also included among the results: LCA Vision Inc. (Nasdaq:LCAV), ViroPharma Inc. (Nasdaq:VPHM), Tween Brands Inc. (Nasdaq:TWB), Credit Acceptance Corp. (Nasdaq:CACC), Children's Place Retail Stores Inc. (Nasdaq:PLCE) and Asbury Automotive Group Inc. (Nasdaq:ABG).
Forest City Enterprises, Federal Agricultural Mortgage and EnerSys lead small-cap percentage losers
Also included among the results: Tree.com Inc. (Nasdaq:TREE), China Nepstar Chain Drugstore Ltd, (Nasdaq:NPD), First California Financial Group Inc.(Nasdaq:FCAL), Vanda Pharmaceuticals Inc. (Nasdaq:VNDA), LCA Vision Inc. (Nasdaq:LCAV) and Astronics Corp. (Nasdaq:ATRO).
Russell slumps in afternoon trading
Small-cap stocks briefly opened higher after the opening, but have steadily slumped in midday and afternoon trading. Bearish sentiments were fueled by the Commerce Department’s report that factory orders showed the weakest performance in three months during May and the continuing ascent of crude oil prices. The National Employment report also added to gloomy news, with payrolls down by 79,000. At 2:27 p.m. ET, the Russell 2000 (NYSE:IWM) was down 12.55, or 1.81%, to 679.04.
During May, factory orders rose by 0.6%, which met Wall Street’s expectation but gave nervous investors no reasons to buy. The Commerce Department’s report showed waning demand for steel, heavy machinery and autos. Soaring fuel prices, weak economic growth and the credit crisis continue to keep investors jittery as long-term prospects remain uncertain.
Crude oil prices gushed higher in afternoon trading to $142.64 a barrel in recent trading. The U.S. dollar is down against the euro and flat against the yen.
The ADP National Employment Report showed a decline of 79,000 in payrolls, which marked the largest decline since November 2002. In addition, ADP revised last month’s gain downward to 25,000 from 40,000. When the ADP report was released about 8:15 a.m. ET, the news sparked a bounce in Treasury futures, trimmed overnight gains in the dollar against the yen and sparked a pullback in overnight gains in stock index futures. The weak ADP figures were troubling ahead of the big monthly employment report slated for Thursday morning.
Analysts at Goldman Sachs cautioned that the correlation between the ADP report and the actual Labor Department monthly employment release has not been that reliable of late. Goldman said that from January 2000 through October 2007, the ADP served up a much tighter projection of the jobs report, but since then the standard . . .
FOMC hits expectations, stocks retain morning rally
Small-cap stocks generated a solid rally through several minor economic reports this morning and then sustained the upside push through a volatile, but ultimately upbeat reaction to the Federal Open Market Committee announcement, which either stalled or ended a rate cut cycle that began back in September 2007. For the day, the Russell 2000 (NYSE:IWM) rallied 8.38, or 1.18%, to 716.30.
The rally in small caps basically recovered about two-thirds of the big slide from Tuesday, but failed to suggest that the market’s breakdown into a new lower range was premature. It will take a decisive push back above 720.50 to validate any kind of bottoming action from today’s rally, or else it will simply look like a dead-cat bounce amid oversold conditions.
The much-awaited FOMC news fulfilled market expectations, and the rally in stocks in the face of no rate cut to serve up cheap money in difficult times was a decent showing.
As for the announcement itself, “The bottom line is that the Committee is now in a wait-and-see mode to see how the economy and inflation unfold during the second half of the year,” Steven Wood, chief economist with Insight Economics, said in an email.
Wood noted that an improvement in economic conditions should spur tighter monetary policy but that a weaker economy might not prompt further rate cuts unless inflation abates. “We believe that the tax rebate effect on consumer spending will quickly fade as the summer progresses and energy prices stabilize or retreat slightly. This . . .
LCA Vision, City Bank and Targanta Therapeutics among 52-week lows
Also included among the results: Blue Phoenix Solutions (Nasdaq:BPHX), Mothers Work Inc (Nasdaq:MWRK), Atlantic Coast Federal Corp (Nasdaq:ACFC), Accuride Corp (Nasdaq:ACW), Penford Corp (Nasdaq:PENX) and Provident Financial Holdings Inc (Nasdaq:PROV).
Here are the new 52-week lows among small caps:
Small caps climb ahead of Fed announcement
Small-cap stocks are rallying in Wednesday midday trading, as oil futures declined sharply after the Energy Department said oil and fuel supplies are larger than expected. Investors are waiting for news from the Federal Reserve’s rate committee, which wraps up a two-day meeting this afternoon. The Fed is widely expected to end the rate cut cycle and talk tough on inflation. At 2:01 p.m. ET, the Russell 2000 (NYSE:IWM) was up 7.88, or 1.11%, at 715.80.
Crude oil prices are sharply lower in afternoon trading. The Energy Department said in its weekly inventory report that crude oil supplies rose, while Wall Street expected a 1.7 million barrel decline. The supply increase gave investors reason to believe that skyrocketing gas prices have lowered demand. Crude is down 3% to $132.73 a barrel in recent trading.
The new home sales report clocked in at minus 2.5% and the inventory of new homes was at 10.9 months, which was a mild rise over the previous report. Although the home sales data was weak, it didn’t deter the stock market, which is already focused on the Fed later today.
“Set the snooze button for 2:15 ET PM today for the FOMC decision and we'll all be tearing apart the text for nuances on what to expect going forward. Market has 50 basis points of tightening priced in for Fed Funds by the end of December,” Andy Busch, global foreign exchange strategist for BMO Capital Markets, said in an email. “The U.S. Treasury's auction of two-year notes Tuesday showed a big surge in demand with the bid to cover ratio at 2.64, up from 2.28 last and an indirect foreign bids of 27.7% that show Treasury market participants believe the Fed tightening . . .
LCA Vision, PowerSecure International and Targanta Therapeutics lead small-cap percentage losers
Also included among the results: Blue Phoenix Solutions (Nasdaq:BPHX), Naugatuck Valley Financial Corp (Nasdaq:NVSL), Monroe Bancorp (Nasdaq:MROE), Southern Cmnty Finl Corp (Nasdaq:SCMF), HEICO Corp (Nasdaq:HEI) and Rex Stores Corp (Nasdaq:RSC).
Here are the biggest percentage losers among small caps:
Bounce on financials ahead of FOMC
Small-cap stocks opened higher Wednesday, providing a welcome respite to the bulls who endured a slide to two-month lows in the Russell 2000 the previous session. The market was underpinned by short-covering amid oversold conditions ahead of this afternoon’s FOMC meeting announcement and by a bounce in financial stocks. At 10:02 a.m. ET, the Russell 2000 (NYSE:IWM) was up 4.67, or 0.66%, at 712.59.
The new home sales report came in at minus 2.5% and the inventory of new homes was at 10.9 months, which was a mild rise over the previous report. Although the home sales data was weak, it didn’t deter the stock market, which is already focused on the FOMC later today.
Earlier this morning, orders for May durable goods came in unchanged, which was slightly softer than the forecast for a rise of 0.1%. Although durables missed the median forecast, it was close enough to have very little impact on stock market trading.
Also on the data front, the MBA mortgage application survey came in at minus 9.3%, which was the lowest level since July 2001. In addition, the report showed that the purchasing index fell 7.4% to the lowest point since February 2003. Also, the refinance index tumbled 12.1% to the lowest level since July 2001. With the housing market still soft and rates firming, mortgage activity has slowed to a crawl.
Crude oil prices were lower this morning, which allowed some breathing room for this morning’s bounce in U.S. equities. However, stocks remain extremely sensitive to intraday gyrations in energy prices, and any rise in black gold during the session could endanger the early bounce in stocks. The weekly inventory report is slated . . .
LCA-Vision skids 24% in pre-market on lowered volume outlook in Q2
Digi International, LCA-Vision and G&K Services among 52-week lows
Digi International Inc. (Nasdaq:DGII), LCA-Vision Inc. (Nasdaq:LCAV) and G&K Services, Inc. (Nasdaq:GKSR) were among the new 52-week lows established during Tuesday's trading among companies with market capitalizations or values under $750 million.
RadiSys Corp. (Nasdaq:RSYS), United America Indemnity, Ltd. (Nasdaq:INDM) and Escalade, Inc. (Nasdaq:ESCA) were also among the 52-week small-cap lows.
Here are Tuesday's 52-week small-cap lows:
Intevac, Digi International and Royal Bancshares of Pennsylvania lead small-cap percentage losers
Intevac, Inc. (Nasdaq:IVAC), Digi International Inc. (Nasdaq:DGII) and Royal Bancshares of Pennsylvania, Inc. (Nasdaq:RBPAA) are among the biggest percentage losers in Tuesday's trading among companies with market capitalizations under $750 million.
LCA-Vision Inc. (Nasdaq:LCAV), G&K Services, Inc. (Nasdaq:GKSR) and TheStreet.com, Inc. (Nasdaq:TSCM) are also among the top small-cap percentage losers.
Here are Tuesday's biggest percentage losers among small caps:
Small caps continue slide
Small-cap stocks opened lower after the opening bell, experienced a slight bump after the Consumer Confidence report was released at 10 a.m., but are continuing to slide in midday Tuesday trading. At 12:37 p.m. ET, the Russell 2000 (NYSE:IWM) was down 8.19, or 1.13%, to 717.18.
The Conference Board reported that April’s Consumer Confidence Index slumped to 62.3, the lowest level in five years, from a revised 65.9 in March. Economists expected the index, which has declined fourth months in a row, to decline to 61.
During a morning press conference, President Bush said Congress should allow more domestic energy production. Higher production would lower record-high gas prices, he said. Bush said gas prices have risen $1.40 per gallon since the Democrats won a majority in Congress, and pointed to stalled efforts to open drilling in Alaska’s Arctic National Wildlife Refuge, which would “likely mean lower gas prices.” The president will consider proposals by Sen. John McCain and Sen. Hillary Clinton to suspend the federal gas tax, but did not provide backing for the proposal. The President also noted that the economic stimulus package is in on the way.
Large-cap movers this morning included drug company Merck & Co. (NYSE:MRK), which was down 8% on news that the FDA rejected a new cholesterol drug. From an overall stock market picture, the news had a somewhat muted impact, because it lifted Merck competitor Abbott Labs (NYSE:ABT) by 3%. In addition, Visa (NYSE:V) posted decent earnings ahead of the opening, and the financial firm is up 1% in midday trading after dipping in earlier action.
Within the small-cap spectrum, LCA Vision Inc. (Nasdaq:LCAV) is down 17%, gapping lower on weak earnings. Intevac Inc. (Nasdaq:IVAC) was down 23% as well, also on earnings news, and TheStreet.com Inc. (Nasdaq:TSCM) was off 13% on soft earnings. Digi International Inc. (Nasdaq:DGII) shares are slumping more than 19% after the Minnetonka, Minn.-based company reported early Tuesday that its second-quarter revenue totaled $43.1 million, which fell short of Wall Street’s expectation of $51.1 million.
Small caps remain lower after short-lived data bounce
Small-cap stocks opened lower, slightly trimmed losses after the Consumer Confidence report came out at 10:00 a.m. ET, but then retreated right back to pre-release levels. The report showed an upward revision to the March report, which provided a brief bid to the market, but it was not enough to catch hold (at least immediately). At 10:01 a.m. ET, the Russell 2000 (NYSE:IWM) was down 1.84, or 0.25%, at 723.53.
The Consumer Confidence report was pegged at 62.3 in April, which was in line with the forecast of 62, but the March number was revised upward to 65.9 versus 64.5. Still, the April figure was the lowest in five years.
Next on line … President Bush is slated to hold a press conference at 10:30 a.m. ET, where he is expected to talk about the economy.
The opening action was soft in line with overnight declines on a dip in European shares as Deutsche Bank posted its first quarterly loss in five years, and French tire company Michelin tumbled 9% on sloppy earnings.
Large-cap companies influencing trade this morning included drug company Merck & Co. (NYSE:MRK), which was down 7% on news that the FDA rejected a new cholesterol drug. From an overall stock market picture, the news had a somewhat muted impact, because it lifted Merck competitor Abbott Labs (NYSE:ABT) by 4%. In addition, Visa (NYSE:V) posted decent earnings ahead of the opening, but the financial firm was down 3% in early action.
The S&P 500 stalled approaching the 1,400 level on the latest push upward, and that key figure resistance will be closely watched through the rest of the week’s major economic events. In the Russell 2000, the market yesterday climbed . . .
LCA-Vision slumps after Q1 results miss
Shares of LCA-Vision Inc. (Nasdaq:LCAV) are sinking ahead of the bell after the provider of laser vision correction services reported first-quarter results this morning that fell short of analysts’ expectations. The small cap said it experienced a decline in procedure volume and that attended exams did not keep pace with the growth in scheduled exams.
Shares skidded 20%, or $2.60, to $9.95 ahead of the opening bell. For detailed price information and recent news stories about LCA-Vision, click LCAV.
Pre-market: Intevac, Jos. A. Bank Clothiers and LCA-Vision lead small-cap volume
Intevac, Inc. (Nasdaq:IVAC), Jos. A. Bank Clothiers, Inc. (Nasdaq:JOSB) and LCA-Vision Inc. (Nasdaq:LCAV) are among the most actively traded companies in Tuesday's pre-market trading among those with market capitalizations under $750 million.
Titan Machinery Inc. (Nasdaq:TITN), Origin Agritech Ltd. (Nasdaq:SEED) and eFuture Information Technology Inc. (Nasdaq:EFUT) are also among the most actively traded small-cap companies in pre-market trading.
Here are the most actively traded small-cap companies in Tuesday's pre-market trading:
Small gain for Russell 2000
The Russell 2000 (NYSE: IWM) posted a rise on a quiet day that saw investors go bargain hunting. The small-cap index advanced 0.85 points, or 0.12%, to 699.75. The Dow Jones Industrial Average (INDU) climbed 57.88 points, or 0.48%, to 12,240.01.
On a year-to-date basis, the Russell 2000 has let go 8.65%, while the Dow has retreated 7.73% and the S&P 500 has declined 8.80%.
Trading began on a bearish note but the bulls returned during the second half of the session as investors took a second look at stocks that had declined for four of the past five days.
The futures were pointing up and the Russell 2000 opened in the green but stayed there only minutes, weighed down by news of more credit problems stemming from the slump in the U.S. housing sector.
Insurer American International Group Inc. (NYSE: AIG) announced that it may have to write off billions in mortgage debt and would need to change the way it values its credit default swaps involving collateralized debt obligations.
That news hurt financials, with shares of insurance companies being among the biggest losers today.
The small-cap index dropped to its lowest levels during today’s session at about 10:20 a.m. ET, but began a choppy ascent into positive territory at about 1 p.m. ET.
With little on the economic front, news that Sunnyvale, Calif.-based Yahoo! Inc. (Nasdaq: YHOO) rejected a $42 billion takeover bid from Microsoft Corp. (Nasdaq: MSFT) grabbed the headlines.
The Redmond, Wash.-based software giant is expected to make an improved offer.
Russell 2000 rebounds cautiously
The Russell 2000 (NYSE: IWM) has recovered from earlier losses and is now above its starting position.
At 12:57 p.m. ET, the small-cap index had added 0.84 points, or 0.12%, to 699.74. The Dow Jones Industrial Average (INDU) was up 36.83 points, or 0.30%, to 12,218.96.
Stocks small and large have turned the corner despite a bearish start due to more credit problems stemming from the stagnating U.S. housing sector.
Insurer American International Group Inc. (NYSE: AIG) announced before the start of trading that it may have to write off billions in mortgage debt. The New York-based company said in a regulatory filing that it would need to change the way it values its credit default swaps involving collateralized debt obligations.
The Russell 2000 opened in positive territory but slipped within minutes.
Elsewhere, Sunnyvale, Calif.-based Yahoo! Inc. (Nasdaq: YHOO) reported before the opening that it will reject a $42 billion takeover bid from Microsoft Corp. (MSFT), arguing that the offer is too low. Analysts expect that Microsoft will sweeten its bid.
The small-cap index managed to rebound after falling to a level of 691 at about 10:15 a.m. ET, rising above the flat line at about 12:40 p.m. ET.
CEO: LCA-Vision hurt by sour economy
LCA-Vision Inc. (Nasdaq: LCAV) CEO Steve Straus said that although consumers continue to indicate interest in the provider of laser vision correction surgeries, the company was hurt by negative economic factors during the fourth quarter. Straus made the comments during a morning conference call.
“In 2007, the U.S. economy and our industry were impacted by a cautious consumer and the macro environmental factors influencing their spending decisions,” Straus said.
“Consumers across the country remain interested in laser vision correction, but they’re not ready to commit to getting the procedure performed compared with the rates we experienced in 2005 and 2006.”
To cope with the sour economy, Straus said LCA is slashing costs. The firm recently reduced its workforce by about 16%, so that staffing levels would meet the expected sales volume.
“We are aggressively managing expenses,” the CEO said. “We continue to control general and administrative costs.”
Additionally, the company is implementing sales and management effectiveness training programs to meet goals. LCA is also using knowledge learned through market research to optimize marketing efforts.
“We’ve reached a point where we can utilize national marketing to supplement our regional marketing efforts to increase awareness and demand for the laser vision correction procedure in our LasikPlus vision centers,” Straus said. “In operations, we’ve expanded the hours of operations in many of our centers to be more consumer-friendly.”
Strauss said that the consumers the company wants to attract are economically challenged.
Small caps open lower
The Russell 2000 (NYSE: IWM) and the other major U.S. indices are in the red despite news of the latest corporate deal making.
At 10:13 a.m. ET, the small-cap index had dropped 7.39 points, or 1.06%, to 691.51. The Dow Jones Industrial Average (INDU) was down 98.11 points, or 0.81%, to 12,084.02.
Search engine Yahoo! Inc. (Nasdaq: YHOO) will reject a bid from Microsoft Corp. (MSFT), the Sunnyvale, Calif.-based company announced before the start of trading.
“Microsoft’s proposal substantially undervalues Yahoo!,” the search engine said in a statement.
The deal was initially valued at about $45 billion but has since decreased to about $42 billion as the price of Microsoft’s shares have fallen. The Redmond, Wash.-based software giant is expected to take its offer directly to Yahoo!’s shareholders.
A merger between the two companies would create a more muscular rival to online search and advertising leader Google Inc. (Nasdaq: GOOG).
More mergers and acquisitions news is coming from networking solutions provider Nortel Networks Corp. and telecommunications heavyweight Motorola Inc. (NYSE: MOT), which are in talks to merge their wireless infrastructure divisions, according to The Wall Street Journal.
Russell 2000 futures inch up
Search engine Yahoo! Inc. (Nasdaq: YHOO) will reject a $45 billion bid from Microsoft Corp. (MSFT), according to news reports over the weekend. The Redmond, Wash.-based software giant will in turn take its offer directly to shareholders.
More mergers and acquisitions news is coming from networking solutions provider Nortel Networks Corp. and telecommunications heavyweight Motorola Inc. (NYSE: MOT), which are in talks to merge their wireless infrastructure divisions, according to The Wall Street Journal.
There are no economic report releases to navigate on Monday, and outside volatility looks calm until we get to Wednesday morning’s Retail Sales report. Look for support Monday at 688 and 680, while resistance is at 712 and 721.
Russell 2000 futures stumble
The Russell 2000 (NYSE: IWM) futures are lower and the small-cap index will open with a drop following economic news.
Gross domestic product expanded an unimpressive annual rate of 0.6%, the U.S. Commerce Department reported this morning. That’s well below economists’ projections and the lowest rise in five years. The economy added 4.9% in the third quarter.
The numbers are disappointing and tell us that the economic slowdown is more serious than was previously expected.
Economic growth for the entire 2007 was 2.2%, compared with 2.9% in 2006.
The data will most certainly be taken into account by the U.S. Federal Reserve, which concludes its two-day policy meeting this afternoon. It is widely expected that the Fed will lower its target federal funds rate from the current level of 3.5%.
The decision will be announced at about 2:15 p.m. ET.
Here are the biggest percentage gainers and losers in pre-market trading among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• NuCO2 Inc. (NUCO), up 16% on news it will be acquired by an affiliate of Aurora Capital Group for $487 million.
• Limelight Networks, Inc. (LLNW), up 11%.
• Pacific Ethanol, Inc. (PEIX), up 8% on news it has received a federal grant of up to $24.3 million to build an ethanol plant.
Biggest percentage losers:
• Hutchinson Technology Inc. (HTCH), down 21% on news of a decline in first-quarter net income.
• LCA-Vision Inc. (LCAV), down 3%.
• SunOpta Inc. (STKL), down 2% on news that a lawsuit has been filed against the company, accusing it of violating federal securities laws.
Small caps lower midday
The Russell 2000 (NYSE: IWM) and the Dow Jones Industrial Average (INDU) are in the red due to news of poor earnings and concerns that interest rates will not fall. At 1:35 p.m. ET, the small-cap index had shed 2.78 points, or 0.34%, to 818.94. The Dow was off 40.88 points, or 0.29%, to 13,829.38.
Investors hoping for a sizeable drop in the U.S. Federal Reserve’s target interest rate may be disappointed, according to an article in The Wall Street Journal. The paper claims that policy makers, who kicked off their two-day meeting this morning, will likely either cut the federal funds rate 0.25% or leave it unchanged.
That was enough to scare away the bulls, and stocks opened in negative territory.
Contributing to the bearish mood was news that United States Steel Corp.’s (NYSE: X) third-quarter net income missed analysts’ projections by falling 35% due to costs associated with an acquisition.
Cincinnati, Ohio-based consumer goods giant The Procter & Gamble Co. (NYSE: PG) also had bad news to report, saying that its profit margin will come under pressure in the coming months due to higher energy costs.
LCA-Vision Q3 revenues shy of Street, lowers guidance
Shares of LCA-Vision Inc. (Nasdaq: LCAV) are sinking this morning after the provider of laser vision correction services under the LasikPlus brand reported revenues shy of expectations and lowered its outlook for the fourth quarter.
For the three months ended Sept. 30, the Cincinnati, Ohio-based company booked revenues of $74.6 million, below the $78.89 million seven analysts polled by Thomson Financial were on average forecasting. For the third quarter of 2006, the small cap earned $55.8 million in revenues.
Net income was $10 million, or $0.51 per share, right inline with the mean estimate of eight analysts polled by Thomson Financial. For the third quarter last year, the company netted $5.3 million, or $0.25 per share.
Going forward, the company said it faces an uncertain business environment in the near-term. LCA-Vision noted the percentage of pre-operative eye exams it was able to convert into treated patients has declined and is impacting the company’s ability to accurately forecast conversion rates. This, coupled with weakening consumer sentiment, gave the company concern for the short-term.
LCA-Vision said it now expects that fourth-quarter earnings per share will be significantly below the $0.27 reported in the fourth quarter of 2006, and that it is suspending revenue guidance. Eight analysts polled by Thomson Financial are on average expecting earnings of $0.52 per share.
Shares of LCA-Vision (LCAV) toppled 28.35%, or $7.97, to $20.14 at 9:50 a.m. ET. Shares of LCA-Vision have been trading in the range of $ 26.60 to $50.69 for the past 52 weeks.
Oxford Industries, Edge Petroleum and Children's Place Retail Stores among new 52-week lows
Oxford Industries, Inc. (NYSE: OXM), Edge Petroleum Corp. (Nasdaq: EPEX) and Children's Place Retail Stores, Inc. (Nasdaq: PLCE) were among the new 52-week lows established Tuesday among companies with market capitalizations or values under $750 million.
Here are today's 52-week small-cap lows:
LCA-Vision: Time to buy?
Eyeballing the share activity of LCA-Vision Inc. (Nasdaq: LCAV) over the past couple of months has left investors rubbing their eyes. The most pressing question: should they take a myopic view of LCA-Vision and maintain a hands-off stance, as it seeks to recover from a recent deep-sea price plunge? Or should they take a more far-sighted outlook, jumping in on a possible buying opportunity and grabbing this beaten-down stock that could provide a tidy profit should it recover?
LCA-Vision is a Cincinnati company that operates 72 LasikPlus vision-correction centers in 31 states and Canada. LCA-Vision’s corporate predecessor, Laser Centers of America, was founded in 1985 by a former surgeon as a management company to help hospitals implement the emerging technology of laser and minimally invasive surgery.
Analysts who follow the company's stock have a bias toward the buy side, according to a Thomson Financial tally. Of the seven analysts polled, three have the equivalent of a “hold” rating on LCA-Vision, while two say “buy.” But two analysts also have the equivalent of a “strong buy” on the stock, including one upward revision August 20. None of the analysts say “sell,” despite the recent share slippage, or perhaps because of it.
When laser vision correction arrived in the 1990s and the U.S. Food and Drug Administration approved in 1995 the first of several types of treatments, LCA-Vision began a rapid commercial rollout. The Lasik procedure came on the scene in 1997 and LCA-Vision’s business took off.
