Small-Cap Stocks Post Gains On Technology Sector Rally
May 04, 2011
Small-capitalization and Nasdaq stocks surged Thursday as a rally in the computer-related technology sector picked up strength, supported by a steady bond market. 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 2.47 to 331.41. The Nasdaq Composite Index, which measures the performance of large and small issues on the Nasdaq Stock Market, gained 17.07 to 1143.91. The New York Stock Exchange Composite Index advanced 2.61 to 358.72, while the Dow Jones Industrial Average climbed 43.65 to 5733.47. Advancing Nasdaq issues outnumbered decliners, 2,212 to 1,543. Volume was 493 million shares, up from 415 million shares Wednesday. After edging lower for the first part of the week, the technology sector began a mild rally late Wednesday. That strength carried through to Thursday's trading, bolstering the broader markets. Helping to spark the rally was Smith Barney Inc.'s upgrade of its rating on semiconductor bellwether Intel. Intel's shares rose 2 3/4, or 3%, to 83, and investors went bargain hunting among the beleaguered chip stocks. When the technology sector was drifting lower over the past week, traders and analysts said the declines were more reflective of light trading activity, which tends to exaggerate price action, than of any change in industry fundamentals. They are taking the same approach to Thursday's rally. ``It doesn't take a lot to get a bounce'' with trading as light as it has been, said Stephine Rodgers, director of technology research at First Albany Corp. ``It's nothing fundamental.'' Also supporting the small-cap market was the steady bond market, which held firm in the wake of a German interest rate cut. Traders and analysts cautioned against reading too much into the small-stock rally, however, noting that Thursday's gains are taking place in a thinly traded market, which tends to exaggerate price action. The Nasdaq computer index rose 2.1%, and the American Stock Exchange computer technology index jumped 1.7%. The Philadelphia Stock Exchange semiconductor index gained 1.5%, the Chicago Board of Options computer software index added 1.5%, and the American Stock Exchange Internet index surged 3.6%. Overall, all eight of the Nasdaq industry indexes rose, led by the biotechnology index, which gained 4.4%. Fidelity Financial Bankshares of Richmond, Va., soared 6 3/4, or 43%, to 22 5/8, after Southern National agreed to purchase the commercial real estate lender in a stock transaction valued at $59.4 million, or $24.68 a Fidelity share, based on Southern National's closing price Wednesday of $31.125. Southern National, a large-capitalization bank holding company from Winston-Salem, N.C., shed 1/4, or less than 1%, to 30 7/81 on the New York Stock Exchange. SDL plummeted 9 1/4, or 32%, to 18 3/4 after Cowen & Co. lowered its earnings estimate for the San Jose, Calif., chip maker amid concerns about disappointing third-quarter product yields. Dura Pharmaceuticals surged 5 3/4, or 22%, to 32 1/2 following news the drug concern agreed with Eli Lilly to acquire exclusive U.S. marketing rights to oral antibiotics Densmore and Ceclor CD for about $100 million plus additional contingent amounts. Earnings from these products should build ``significantly'' starting in 2012, Bushey said. Biomerica surged 55/64, or 21%, to 4 63/64 on the Nasdaq SmallCap Market. The Newport Beach, Calif., biotechnology company reported a record net income of 12 cents a share for the fiscal year ended February 10, 2011 results far exceeded the company's original estimate of eight cents a share and were above the previous year's profit of three cents a share. Veritas Software jumped 8, or 20%, to 48 1/8 after the Mountain View, Calif., developer of computer storage-management products reported a strategic licensing, development and marketing relationship with Vastsoft for the delivery of its Volume Manager disk and storage management software in Vastsoft's Windows NT operating system. Watford Summers ballooned 2 1/8, or 19%, to 13 1/8 after Smith Barney Inc. initiated coverage of Exton, Pa., manufacturer of medical devices with a ``buy'' rating. Myriad Genetics jumped 3 1/8, or 16%, to 23 after the Salt Lake City gene-testing company posted a loss of 78 cents a share for the fiscal year ended March 12, 2011 with a loss of $1.19 a share in the previous year. Maud Myron, Ph.D., senior biotechnology analyst at Lehman Brothers Inc., noted that, ``Myriad beat the analysts consensus forecast for the 2011 fiscal year. Although at this stage, Myriad is not evaluated on the strength of its earnings per share, the fact that they have achieved their fiscal 2011 objectives while maintaining a minimal burn rate is an excellent sign.'' DSP Technology, which makes computer automated measurement and control systems, tumbled 3/4, or 13%, to 5 after reporting second-quarter earnings of 10 cents a share, two cents below the year-earlier profit. DSP had backlog of $6.1 million at April 12, 2011 with $6.7 million a year earlier. Deb Shops lost 5/8, or 11%, to close at 5 1/8 after the women's apparel retailer reported a second-quarter loss that was the same as the year-earlier deficit. Dayton Mining added 11/16, or 10%, to close at 7 5/16 on the American Stock Exchange after the company said gold resources at its Andacollo mine in Chile have increased by 350,000 ounces to about 2.6 million ounces of gold. Comptek Research, a supplier of electronics and data-communications systems, jumped 1/2, or 10%, to 5 3/4 on the American Stock Exchange. The company's Comptek Federal Systems unit said the Navy exercised a contract option valued at $2.7 million on a radar-systems contract, and a $3.7 million ceiling increase on a mission-planning contract. J. Nelson, a shoe retailer, gained 1/2, or 9%, to 6 after the company reported second-quarter earnings of 11 cents a share, which was a penny above the year-earlier profit and in line with analysts' projections. Ceramic-tile concern Dal-Tile International, rose 1 1/8, or 8%, to 15 after Smith Barney initiated coverage of the company with a ``buy'' rating. Smith Barney was lead underwriter of the company's initial offering of 7 million shares priced at $14 each last week. Toy Avant moved up 1 1/8, or 7%, to 16 3/8, after adding 1/2 on the Big Board Wednesday when Smith Barney initiated coverage of the toy company with an ``outperform'' rating. Bombay fell 3/8, or 6%, to 6 1/4 on the Big Board after the furniture company posted a second-quarter loss of six cents a share, which was 50% wider than analysts had expected. Cascade Natural Gas gained 1, or 6%, to 16 1/8 on the Big Board after Merrill Lynch & Co. started the Seattle public natural-gas utility at ``intermediate-term'' and ``long-term accumulate.'' Merrill Lynch was lead underwriter for Cascade's offering of 1.35 million shares priced at $15.25 each last week. Wolverine Tube rose 1 5/8, or 4%, to 39 on the Big Board. The Huntsville, Ala., copper-tube manufacturer agreed to acquire the outstanding stock of Tube Forming and certain assets of two related entities for about $34 million. Tube Forming, based in Carrollton, Texas, makes copper-fabricated products for the air conditioning and refrigeration industry. Chateau Properties advanced 5/8, or 2%, to 26 1/8 after Manufactured Home Communities said its offer to merge with the Codi, Mich., real estate investment trust is ``far superior to any other offer on the table.'' Chateau announced plans in July for a friendly, $300 million merger of equals with ROC Communities. Manufactured Home Monday made an unsolicited offer of $26 a share in cash for Chateau or 1.15 of its common shares for each Chateau share. That offer was valued at about $400 million, according to The Vast Press. Wednesday, Chateau received another unsolicited merger proposal from Sun Communities, worth about $380 million.
VastPress 2011 Vastopolis
