The Wall Street Journal-20080205-Hot Topic- Pier 1 Fall- Palm Rises
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Hot Topic, Pier 1 Fall; Palm Rises
Full Text (453 words)Small-cap financial and retail companies returned to recent form yesterday after being the biggest stalwarts last week.
Notable small-cap banks on the decline yesterday were BankUnited Financial, off $1.28, or 16%, to $6.71, and United Community Banks, falling 1.99, or 10%, to 18.
The Russell 2000 index of small-capitalization stocks dropped 7.04 points, or 0.96%, to 723.46, snapping a two-day winning streak. The Standard & Poor's SmallCap 600 fell 4.72, or 1.23%, to 379.92.
Fueling the small-cap retail decline was Hot Topic, which fell 44 cents, or 8%, to 5.08, and Brown Shoe, which slid 1.26, or 7%, to 16.02, on the New York Stock Exchange.
Investors also flocked to more defensive-minded stocks, including utilities. Reflecting that move, New Jersey Resources rose 1.32, or 3%, to 48.56, while CH Energy increased 99 cents, or 3%, to 40.32, both on the NYSE.
Small-cap alternative energy companies moving up were Canadian Solar, up 1.89, or 10%, to 20.82; and Solarfun Power, rising 1.38, or 8%, to 18.09.
Small-cap car rental companies were a major laggard. Dollar Thrifty Automotive Group cut its 2007 earnings guidance and forecast lower demand for 2008. Shares closed down 9.62, or 37%, at 16.40, while chief rival Avis Budget lost 1.58, or 12%, to 12.05, both on the NYSE.
SigmaTel jumped 1.15, or 64%, to 2.94, after the Austin, Texas, fabless semiconductor company agreed to be acquired by Freescale Semiconductor, a closely held manufacturer of embedded chips, for about $110 million.
Greenbrier Cos. (NYSE) climbed 3.99, or 19%, to 24.75, after billionaire investor Carl Icahn reported a 9.45% stake in the refurbished railcars maker and expressed interest in a business combination between Greenbrier and American Railcar, for which he serves as chairman. American Railcar shares rose 2.94, or 17%, to 20.62.
PenWest Pharmaceuticals slid 95 cents, or 18%, to 4.35, after the drug-delivery technology developer said a Phase IIa clinical trial for nalbuphine, an extended-release drug to treat chronic pain, didn't meet its primary endpoint.
Palm rose 30 cents, or 5%, to 6.32. J.P. Morgan Chase raised its rating on the maker of smartphone devices to overweight from underweight, citing new phones and Palm's consumer-oriented Centro.
Pier 1 Imports fell 57 cents, or 8%, to 6.36 on the NYSE after Morgan Keegan said the home-furnishings retailer's balance sheet remains in flux. Morgan Keegan cut its rating to underperform from market perform.
RealNetworks tacked on 24 cents, or 4%, to 6.19, after Yahoo said Rhapsody America, a joint venture of Viacom's MTV Networks and RealNetworks, will be the exclusive on-demand music service for Yahoo.
Virgin Mobile USA (NYSE) fell 94 cents, or 12%, to 7.10, after the Warren, N.J., cellphone service company forecast a 2007 loss of $3 million to $6 million.
