The Wall Street Journal-20080215-Netgear Drops 20-- Avis Gains

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Netgear Drops 20%; Avis Gains

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Driven down by two types of consumer-related stocks, staples and discretionaries, small-capitalization stocks erased all of the gains and positive momentum of Wednesday.

"With the credit environment, every time you see the light at the end of the tunnel, the next train comes barreling down the tunnel at you," said Michael Petroff, a portfolio manager at Heartland Advisors in Milwaukee.

Leading the declines among the consumer-discretionary sector were MarineMax, off $1.39, or 8.8%, to $14.37 on the New York Stock Exchange, and Big 5 Sporting Goods, down 87 cents, or 6.8%, to 11.95.

Stamps.com slid 1.24, or 11%, to 9.78 after posting a 49% drop in fourth-quarter profit.

Notable consumer staples that fell were Spartan Stores, down 1.19, or 5.3%, to 21.49, and Chattem, off 3.24, or 4%, to 78.21.

For the session, the Russell 2000 index of small-cap stocks fell 16.61 points, or 2.3%, to 705.32 but remains 5% above its low of the year. The Standard & Poor's SmallCap 600 declined 8.18, or 2.15%, to 371.99.

Technology stocks continued the weakness gripping most in the sector in 2008, showing that the positive upticks of the previous couple of days may have been nothing more than a head fake. Among the decliners in the industry, which has been beset by disappointing guidance from several major members, Netgear fell 5.28, or 20%, to 21.59 after the network-equipment designer said fourth-quarter net income fell 7% and forecast first-quarter revenue would be less than Wall Street expectations.

Despite continued softness in the financial sector yesterday, downtrodden bond insurers had a reprieve after Moody's said MBIA and Ambac Financial Group were "better positioned from a capitalization and business franchise standpoint." MBIA closed up 98 cents, or 8.4%, to 12.62, while Ambac Financial Group ended at 10.53, up 12%, or 1.16, both on the NYSE.

Advanced Medical Optics (NYSE) rose 2.03, or 10%, to 23.29 after the Santa Ana, Calif., optical-care company posted a wider fourth-quarter loss. Biopharmaceutical company Dendreon climbed 49 cents, or 9%, to 6.17. Dendreon said results from two late-stage trials of its Provenge prostate-cancer immunotherapy showed that patients experienced improved survival.

Allscripts Healthcare slid 4.12, or 27%, to 11.27 after the Chicago clinical-software developer posted fourth-quarter adjusted earnings and revenue that were less than Wall Street expectations, with the company forecasting 2008 revenue growth of 20% to 25%.

Avis Budget Group (NYSE) increased 1.18, or 10%, to 12.84 after the Parsippany, N.J., vehicle-rental company posted an adjusted fourth- quarter profit that was more than analysts' expectations amid higher revenue.

A quarterly report and executive change at AeroGrow hit the stock, which fell 1.12, or 19%, to 4.90. The Boulder, Colo., gardening- products company posted a fiscal-third-quarter loss shy of internal expectations. The company named President and Chief Operating Officer Jervis Perkins to succeed Michael Bissonnette as chief executive.

Overhill Farms gained 24 cents, or 5.8%, to 4.41 on the American Stock Exchange after the Los Angeles custom-prepared-foods maker declined a proposal from GESD Capital Partners and Citicorp Venture Capital to acquire the company for $4.40 a share, saying the offer doesn't reflect the intrinsic value and long-term prospects of the company.

Faro Technologies rose 4.27, or 17%, to 29.26 after the Lake Mary, Fla., software-systems maker said fourth-quarter net income more than doubled, led by strong sales growth in each of its regions.

Astronics tumbled 10.36, or 32%, to 22.23 after the East Aurora, N.Y., lighting-systems maker posted fourth-quarter earnings shy of Wall Street estimates on narrower margins stemming from increased research and design costs.

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Jerry DiColo contributed to this article.