The Wall Street Journal-20080117-SWS Group Rallies 9-- Knight Wins
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SWS Group Rallies 9%; Knight Wins
Small stocks reversed footing, pushing up on strong moves for financial and consumer discretionary stocks, while a continued drop in the price of oil weighed on some energy holdings.
"Small-caps are clearly leading today," said Brett Hawkins, who manages Old Mutual TS&W Mid-Cap Value I fund. "They've been hit the hardest and led the large-caps down, though now they're bouncing the most and leading the upside."
Several small caps got a boost following quarterly reports from large-cap financials J.P. Morgan and Wells Fargo.Leading the gains among small-cap financials were Irwin Financial, up 76 cents, or 12%, at $7.24, and SWS Group rising 1.01, or 9%, to 12.67, both on the New York Stock Exchange.
The Russell 2000 index of small-capitalization stocks rose 2.48 points, or 0.36%, to 699.91, which only slightly erased a 2.1% drop in the index from Tuesday. The Standard & Poor's SmallCap 600 increased 1.53, or 0.42%, to 362.88.
Reflecting subsided fears for a recession, several retailers and other consumer discretionary stocks leapt, including Christopher & Banks, up 1.20, or 14%, at 9.74; Nautilus rising 54 cents, or 15%, to 4.26, on the NYSE; and Stein Mart, up 47 cents, or 12%, at 4.28.
Bucking the positive move for the sector, apparel and sports equipment retailer Quiksilver slid 39 cents, or 5%, to 7.04, after widening its loss guidance for the first quarter.
Home builders, which have been hit as hard as any companies in the wake of the subprime crisis, rallied yesterday. "If you believe there's any semblance of a bottom, you could potentially make a value case for the ones that aren't going to go bankrupt," said Mr. Hawkins.
Among the home builders moving up, Hovnanian rose 70 cents, or 12%, to 6.63, while M/I Homes climbed 1.02, or 13%, to 9.03, both on the NYSE.
As oil continued its descent, falling to a new four-week low, energy stocks were driven downward, including NYSE-listed companies Pioneer Drilling, which fell 41 cents, or 3%, to 11.86, and ION Geophysical, down 63 cents, or 5%, at 12.73.
Syniverse rose 2.18, or 16%, to 15.75, after the Tampa network- engineering services company forecast 2007 revenue above Wall Street expectations, citing growth in data-related products, and roaming and clearing services.
Two restaurant-operators were also in the news with Red Robin Gourmet Burgers, up 2.12, or 8%, to 29.68, after the restaurant chain boosted its full-year earnings guidance following a jump in fourth- quarter revenue and same-store sales.
However, California Pizza Kitchen declined 2.17, or 18%, to 10.10. The Los Angeles casual-dining chain lowered its fourth-quarter earnings guidance after posting same-store sales below previous expectations.
VistaCare climbed 1.29, or 18%, to 8.30, after the Scottsdale, Ariz., hospice services provider agreed to be acquired by Odyssey Healthcare for $8.60 a share, or about $147.1 million. Odyssey closed trading at 8.90, up 46 cents, or 5.5%.
Knight Capital Group jumped 2.43, or 19.4%, to 14.95, after the Jersey City, N.J., stock-trading and asset-management company said higher profit margins led to a 4.5% increase in fourth-quarter earnings.
