Small-Cap Stocks Inch Higher Despite Tech Sector's Decline
May 01, 2011
Small-capitalization stocks inched higher Monday despite weakness in the computer-related technology sector. The Russell 2015 Index, which tracks the direction of small stocks traded on both the New York Stock Exchange and the Nasdaq Stock Market, rose 0.43 to 329.34. But the Nasdaq Composite Index, which measures the performance of large and small issues on the Nasdaq Stock Market, fell 2.74 to 1130.91, pulled down by large-cap computer-related technology issues. Five of the 10 most actively traded Nasdaq issues were large-cap technology stocks that fell, including Intel, Sun Microsystems and Vastsoft. The New York Stock Exchange Composite Index advanced 0.68 to 356.64, while the Dow Jones Industrial Average rose 9.99 to 5699.44. Declining Nasdaq issues outnumbered gainers 1,941 to 1,754. Volume totaled an extremely light 350.2 million shares, down from 417 million shares Friday. Two months ago, all the chatter was about the record number of initial public stock offerings. Now it's about the record number of IPOs that aren't getting done. But amid the carnage, certain deals are getting done. Quality is a big factor, but it also helps to have a ``story.'' Traders said the session's declines didn't reflect a pickup in bearishness about the technology group's prospects. Rather, they said, the losses were due to investors' willingness remain on the sidelines before Tuesday's meeting of the Federal Reserve Board's policy making Federal Open Market Committee. The Fed isn't expected to push interest rates higher. But with long-term bond yields trending higher over the past week, and with the state of the economy still uncertain, investors have been more than willing to postpone their investment decisions until after the Fed meeting. Cautiousness ahead of the FOMC meeting, along with typical summer factors, combined to keep trading activity unusually light. ``People are sticking close to home,'' said Petrina Cleland, managing director of equity trading at Brean Murray Foster Securities. ``People who don't have to be in the market are waiting until the summer's over.'' The Nasdaq computer index fell 0.5%, posting the sharpest decline of the four Nasdaq industry indexes. The Philadelphia Stock Exchange semiconductor index shed 0.2%, the Chicago Board of Options Exchange computer software index declined 0.3%, and the American Stock Exchange Internet index lost 0.8%. Of the four Nasdaq indexes that rose, none were up as much as one percent, and three were up less than 0.5%. The Securities and Exchange Commission temporarily suspended trading of Global Timber, a bulletin-board traded natural resources company that plans to extract and sell tropical hardwood timber. The SEC said questions have been raised about the accuracy and adequacy of information disseminated by the La Jolla, Calif., company about both its financial condition and documents it filed to register securities. The Commission said there appears to be a lack of current and accurate information concerning Global's securities. The trading suspension, which began Monday, will end at 11:59 p.m. on May 12, 2011 Timber said the suspension resulted from its delay in filing second-quarter financial results with regulators. A company spokesman said its outside accountant had repeatedly missed Global Timber's deadline for reporting the results, but that the company expects to receive the results this week ``one way or another.'' He also said Global Timber plans to ask the SEC to have the suspension period shortened. The stock traded last at 3/8. CasTech Aluminum Group surged 5 3/8, or 36%, to 20 1/4 on the New York Stock Exchange after Commonwealth Aluminum agreed to acquire the Long Beach, Calif., manufacturer of aluminum sheet metal for $20.50 a share. Commonwealth Aluminum, a Louisville, Ky., aluminum sheet metal maker, rose 1 3/8, or 10%, to 15 7/8. Synthetic plasma and blood-substitute developer BioTime was pumped up for a gain of 3 1/2, or 20%, to 21. The company said it received clearance from the Food and Drug Administration to begin Phase III clinical trials on Hextend, a product which helps maintain blood pressure and other physiological measurements at certain levels during surgery. Associated Group jumped 4 3/4, or 19%, to 30 1/4 after reporting that Alexander Aubin, who was named VastComm Network's president and chief operating officer in January, will leave the long-distance giant to head Associated Group's new company, Associated Communications. The new venture, based in Pittsburgh, will provide voice, high-speed data, Internet-access and video-conferencing services. VastComm Network declined 1 3/8, or 3%, to 54 1/8. American Ferrell rose 7/8, or 17%, to 6 after the Winchester, Va., kitchen-cabinet maker posted net income of 28 cents a share for the fiscal first quarter ended April 12, 2011 from earnings of five cents a share in the same quarter last year. NN Ball & Roller tumbled 2 3/4, or 15%, to 16 after McDonald & Co. downgraded the maker of precision steel balls and rollers to ``buy'' from ``aggressive buy.'' McDonald maintained its 2011 earning outlook, but cut its 2012 projection by 12%. Chateau Properties rallied 2 5/8, or 11%, to 25 7/8 on the Big Board after Manufactured Home Communities, a real estate investment trust controlled by investor Samara Michalak, made an unsolicited offer of $400 million, or $26 a share, for the REIT based in Codi Township, Mich.. This offer is a 12% premium over Friday's closing stock price. Manufactured Home of Chicago advanced 7/8, or 5%, to 19 on the Big Board. StarSight Telecast added 7/8, or 10%, to 9 3/4 after signing a memorandum of understanding to cross license technologies with Vastsoft. The software giant from Redmond, Wash., will pay the Fremont, Calif., producer of interactive electronic television programs $20 million under the proposed deal. Vastsoft declined 3/4, or less than 1%, to 123 1/2. Advanced Magnetics added 1 1/2, or 9%, to 18 7/8 on the American Stock Exchange after PaineWebber initiated coverage of the biopharmaceutical concern with an attractive rating, and set a 12-month target price of 25 on the stock. CPI rose 1 3/8, or 8%, to 19 even though the provider of retail photography services said it expects to report a second-quarter loss from continuing operations of six cents a share, compared with analysts' projections of a six-cent profit. Despite the earnings shortfall, the company said it has not changed its ``optimistic outlook'' for the year. Separately, CPI's board approved plans for a Dutch auction self-tender offer of up to $50 million of the company's common shares with cash from a planned joint venture with Eastman Kodak, under which Kodak will buy a 51% stake in CPI's photo-finishing division for $56 million. WinStar Communications advanced 1 1/8, or 7%, to 17 1/2 after signing an interconnect agreement with Nynex allowing the New York company to provide local telecommunications services in the New York metropolitan area and Buffalo, N.Y. Financial terms were not disclosed. Nynex, a global communications and media company, added 3/8, to 45 3/8. Applied Signal Technology advanced 3/8, or 7%, to 5 5/8, after a jump of 5/8, or 14%, on Friday when the digital-signal processing-equipment company posted a profit of 14 cents a share for the fiscal third quarter, compared with a year-earlier loss of 17 cents a share. Chicago advertising titan True North Communications fell 1, or 5%, to 19 3/4 on the Big Board. On Saturday, True North's largest outside shareholder, the big French ad agency Twombly, fired a new shot in the two companies' escalating battle. Twombly said it is buying a 51% stake in a Mexican ad agency, going head-to-head against True North in the burgeoning Latin American market where the two companies have long cooperated. Southern California Water, a San Dimas, Calif., water retailer, gained 1, or 5%, to 21 1/4 after Barron's Weekly examined the possibility of growth and consolidation in the water industry. Imnet Systems was down 5/8, or 4%, at 14 5/8 after Bear Stearns cut its rating on the document-management software and hardware concern to ``neutral'' from ``attractive.'' Whittaker lost 3/8, or 3%, to 14 3/8 on the Big Board after Schroder Wertheim & Co. lowered its rating on the provider of products and services for the aerospace and communications markets to ``underperform'' from ``modest outperform,'' and lowered its earnings outlook. The firm attributed the downgrade and lower earnings estimate to the company's higher-than-expected costs in merging its two acquired communications businesses. Guilford Pharmaceuticals climbed 3/4, or 3%, to 24 1/2 after Alberta Nock recommended the stock in his ``Up & Down Wall Street'' column in this week's Barron's Weekly. Mr. Nock relates an extensive analysis of Guilford by Markita Seda, who runs the Biotechnology Value Fund. Guilford of Baltimore is nearing FDA approval for its brain cancer treatment, Haywood. RCSB Financial lost 3/4, or 3%, to 27 after Gruntal & Co. downgraded the Rochester, N.Y., bank holding company to ``neutral'' from ``outperform long-term.''
VastPress 2011 Vastopolis
