The Wall Street Journal-20080201-Hovnanian Vaults 14-- TiVo Soars

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Hovnanian Vaults 14%; TiVo Soars

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Gains for home builders and retailers led small-capitalization stocks to their best day in a week despite poor weekly jobs figures and a report of consumer-spending weakness.

The Russell 2000 index of small-cap stocks rose 17.81 points, or 2.56%, at 713.30. For January, the Russell fell 6.9%, its third straight month in the red for its longest monthly losing streak in five years.

The Standard & Poor's SmallCap 600 rose 9.83 points, or 2.69%, to 375.51, leaving it 5% lower for the month.

David DiPietro, president of specialty investment bank Signal Hill, said some of the small-cap strength can be attributed to the recent interest-rate cuts and rhetoric by the Federal Reserve, which gave investors an underlying feeling that the Fed would do whatever it could to stave off a recession.

"Once that fear was alleviated, you can see small caps . . . really got off to a fast start and have outperformed the other averages," he said.

In trading, Hovnanian (NYSE), vaulted up $1.24, or 14%, to $9.99, and Meritage Homes (NYSE), soared 2.43, or 18%, to 16.04.

The boost for consumer discretionary stocks reflected further easing in the price of oil, which was seen to give consumers more to spend on items such as clothing. Theadvance was led by AnnTaylor Stores (NYSE), which rose 2.30, or 10%, to 25.13 after the women's clothing retailer said it will close 117 stores in the next three years and reduce headquarters staff.

Jos. A Bank surged 3.38, or 14%, to 27.24, and Brown Shoe (NYSE), jumped up 1.50, or 9.6%, to 17.19.

Shareholders of bond insurers had a respite after large-cap MBIA executives said they were confident the company would be able to maintain its crucial AAA rating. Ambac Financial rose 79 cents, or 7.3%, to 11.64.

TiVo rocketed up 1.97, or 29%, to 8.77, after a federal appeals court affirmed that EchoStar and Dish Network have been illegally using "time-shifting" video software pioneered by the Alviso, Calif., company.

Audible shot up 2.09, or 22%, to 11.42 as large-cap Amazon.com agreed to buy the Wayne, N.J., audio-content provider for $11.50 a share.

Meanwhile, Medicis Pharmaceutical (NYSE) slipped 1.41, or 6.5%, to 20.38. The Scottsdale, Ariz., prescription skin-product marketer said the Food and Drug Administration won't accept the company's biologics license application for the botulinum toxin type A Reloxin because it isn't sufficiently complete.

TurboChef Technologies fell 1.46, or 12%, to 10.25, after key customer Starbucks said it will stop selling hot breakfast sandwiches. The Atlanta maker of high-speed ovens is the exclusive supplier of ovens for the coffee-retailing giant.

Rofin-Sinar Technologies added 6.38, or 18%, to 42.51, as the maker of laser-based systems posted fiscal first-quarter earnings above year-earlier results and higher than analysts had expected. Concur Technologies rallied 6.79, or 24%, to 35.06, after the Redmond, Wash., maker of software for corporate-expenses management forecast higher revenue than Wall Street was expecting for both the second quarter and full year.

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Steven Russolillo contributed to this article.