Several small-cap stocks with market capitalizations between $25 million and $2 billion hit new 52-week highs today.
The big story today is the U.S. dollar. It's getting creamed, and that means gold prices and gold stocks are higher.
As you might expect, we're seeing some gold stocks make the Top Gainers list today. Keegan Resources (AMEX:KGN) was up 18%, Vista Gold (AMEX:VGZ) jumped 20% and some warrants for Goldcorp (NYSE:GG-WT) were 15% higher.
Gold has been making headlines over the last couple of weeks as it has pushed to $1,000 an ounce. Today, it broke that resistance line and gold futures for October finished at $1,038, trading intra-day as high as $1,043.80.
The major indices were essentially flat for the day, which is to say, they performed better than yesterday. The Dow Industrials finished with a 30 point loss, the Nasdaq posted an 1 point loss, and the S&P 500 finished with a 3 point loss. The small cap benchmark, the Russell 2000 finished with a 1 point decline.
In spite of the recent weakness in the stock market, the sudden surge in Merger & Acquisition activity should be considered bullish.
On the losing side of the small cap market today was Imperial Industries (Nasdaq:IPII), which lost 27%. Imperial makes building supplies, which should explain the weakness.
In light of the recent worry about China's real estate market, it should be no surprise to see China Housing & Land (Nasdaq:CHLN) on the loser list with a 15% loss.
Finally, in typical "buy the rumor, sell the news" action, biotech Sinovac (AMEX:SVA) fell 17% after it signed a supply agreement for its swine flu vaccine with a South Korean company. Terms of the deal weren't disclosed, which no doubt disappointed investors.
Now for other market news…
*****That was quite a sell-off yesterday. We haven't seen a drop that big since the early days of July. Volume was pretty heavy, too. And no sector was spared.
Briefing.com reports that 95% of the S&P 500 was in the red by the close. Financials seemed to have borne the brunt of the decline. The Financial Select Sector SPDR (XLF) was down 5.3%. But if you were holding an inverse ETF like the UltraShort Financial ProShares (SKF) like TradeMaster Daily Stock Alert members were the day wasn't so bad.
The most troublesome aspect of yesterday's sell-off is that it came amidst some pretty good news. The ISM Manufacturing Survey came in much better than expected and pending home sales for July was also much better than expected. Plus, the Wall Street Journal is reporting that the IMF has raised global growth estimates for 2010 again to just below3%.
Of course, oil prices responded to the manufacturing data by posting an early 2% gain. Unfortunately, that turned into a 2.7% loss as the day went on.
*****Cash for Clunker Stocks dominated yesterday's action. Bank of America lost 6%, Citigroup (NYSE:C) was down 9% and AIG (NYSE:AIG) lost 21%. Even more startling, Citi accounted for 20% of the volume on the NYSE.
Such concentrated selling in the financials sector shouldn't be that surprising. Even the bulls have been scratching their heads at the gains AIG and Citi have been making. It remains to be seen if investors can let some of the air out of these stocks without taking the whole market down.
*****Oil is rebounding a bit today. Inventories fell 3.2 million barrels last week.
British Petroleum (NYSE:BP) announced a major find in the Gulf of Mexico. Some are saying it could be more than 3 billion barrels. Along with the massive find by Brazil from a couple weeks ago, we might start to wonder if new supply might affect prices.
Ian Wyatt is the Chief Investment Strategist of SmallCapInvestor.com and author of The Small-Cap Investor: Secrets to Winning Big with Small-Cap Stocks. You can learn more about his book and receive small-cap stock picks at www.smallcapbook.com.
Small-cap stocks turned in their best performance of the New Year today, as investors decided that a dreary picture of the current economic environment would simply make it that much easier for incoming President-elect Obama to push through a big fiscal stimulus package. The Russell 2000 (NYSE:IWM) closed up 9.68, or 1.92% at 514.71, the highest daily finish since November 4. For the first three days of trading in 2009, the Russell is up 3.1%, while the Dow is up 2.7% and the S&P 500 is up 3.5%.
In what promises to be a very busy week on the economic data front, the market skipped merrily through several gloomy reports today, with services sector activity, pending home sales and factory orders all consistent with an economy mired deep in recession. Even when a report beats the forecast, as was the case with today’s ISM Non-Manufacturing report on services sector activity, it’s still a low number historically. For the record, the ISM report came in at 40.6, well above the consensus projection of 37.0 and a nice turn of events considering the ISM’s tally on manufacturing Friday reflected a 28-year low.
Elsewhere on the data front, factory orders came in down 4.6%, which was quite a bit ...
The Russell 2000 (NYSE:IWM) posted a large increase for the second consecutive session on upbeat financial and housing news. The small-cap index advanced 19.86 points, or 2.91%, to 701.28. The Dow Jones Industrial Average (INDU) rose 187.32 points, or 1.52%, to 12,548.64.
On a year-to-date basis, the Russell 2000 has declined 8.45%, while the Dow is down 5.40% and the S&P 500 has lost 8.07%.
Stocks small and large began the day in the green on news before the start of trading that investment bank JPMorgan Chase & Co. (NYSE:JPM) has raised its offer for Bear Stearns (NYSE:BSC) to $10 a share from $2 a share. The move is in response to disgruntled employees at Bear Stearns complaining that the original bid was too low.
The bulls gained strength at 10 a.m. ET, when the National Association of Realtors reported that sales of existing homes rose 2.9% to an annual rate of . . .
There are numerous risks involved in investing in junior mining companies. They are dependent on the price of metals and investor sentiment toward metals. They may be highly leveraged and each individual miner firm has operating risk, management risk, financial risk and of course, the development risk of finding the metals for which they are mining.
On the other hand, many of these same factors can result in upside opportunity; there are junior mining stocks that do indeed hit "pay dirt."
Given the risks and challenges, it is essential to rely on advisors with proven, long-standing records of expertise in the sector. Such is the case with the three advisors we turn to today: Adrian Day, Brien Lundin and Doug Casey.
"When building a portfolio of junior mining stocks, stick with the best—not just the cheapest," says Adrian Day, in his industry-leading The Global Analyst.
Though he is cautious near term, the money manager and advisor forecasts that gold is still only part way through its current bull move and still likely has years to run.
Day says that if he were to build a gold and resource portfolio today, from scratch, his favorites would be Vista Gold Corp. (AMEX: VGZ), Virginia Mines Inc. (TSE: VGQ) and Allied Nevada Gold Corp. (AMEX: ANV).
"Vista Gold, which has a market cap of $194 million, owns about 0.4 oz of gold per share in the ground, making it cheap on an asset basis. The company has a strong balance sheet and is moving to monetize its assets, including moving forward on production from one advanced property,” Day says. “The business model, with lots of known but high-cost ounces in the ground, gives it good leverage to the gold prices.”
Day says he likes Virginia Mines, which he calls “a successful prospect generator” in Quebec, because the company has cash and a royalty on a gold property it sold last year, and on an asset basis, remains a good value. He says the small cap has over a dozen active projects, with four current drill programs, mostly in joint-venture with others who spend the money to earn into Virginia's projects.
Triad Guaranty Inc. (Nasdaq: TGIC), Graham Corp. (AMEX: GHM) and US BioEnergy Corp. (Nasdaq: USBE) are among the biggest percentage gainers in Friday's trading among companies with market capitalizations under $750 million.
Here are today's biggest percentage gainers:
These are the biggest percentage losers among companies with market capitalizations under $500 million:[ More » ]