The Night Watch: A Cavalcade of Penny Stocks Moves Sharply

(Updated from 7:37 p.m. EDT)

During the week before Labor Day it is amazing what is considered "price-moving" news.

That's not to belittle Focus Enhancements' (FCSE Quote) midday announcement that its ASIC technology will be used in the new PictureTel (PCTL Quote) 900 Series video conferencing system. Certainly not.

The news was enough to muster up 38% gains during the day session but usually the buying fervor that comes from these types of technology announcements wanes by night. Tonight was no different. After early-evening gains of up to 30%, shares fell 6 cents, or 4%, to $1.50.

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Everything Brazilian is now the rage! No wonder investors were fussin' over FUSN after Internet software provider Fusion Networks (FUSN Quote) fused a deal with a Brazilian IT user association.

Fusion makes one-to-one Internet marketing software, portal technology and content and will license its Internet portal software to Sucesu - Sao Paulo. The company gained more than 60% on the announcement during the day, but retreated 37 cents, or 23%, to $1.25 after the close.

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Other stocks didn't even need news to get everyone excited.

Compositech (CTEK Quote) rocketed 100% higher during the day session and pushed up a further 15 cents, or 41%, to 53 cents tonight. It's easy to push around a penny stock, though, especially after it hits a 52-week low of 15 cents (as Compositech did Aug. 18). Yes, you could have owned a share of CTEK for the price of a supermarket gumball.

There is no published news to explain the sudden interest in CTEK, only the swirl of rumor. We at TheStreet.com don't like to spread rumors, so you didn't hear it here, OK? Lean in closer. According to a trader message in a chat room, Compositech's negotiations to acquire the Aeon Group have fallen through because the cash requirements would be too high to raise under the current market conditions for B2B e-commerce companies. There was no answer when TheStreet.com called Compositech for comment.

This message-board statement could or could not be true, but sometimes, in the world of penny stocks, this kind of chatter is enough to double a stock's price. Tonight CTEK was the most active stock both on Island and Archipelago. It settled at 68 cents on Archipelago.

Compositech makes fiberglass epoxy laminates for circuit boards used in the electronics industry. The company was the first to use the more efficient fiberglass for the construction of its products.

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Moving along to even more obscure reasons to buy shares, NCS HealthCare(NCSS Quote) rallied 20% earlier tonight neither on news nor on rumors but on suspiciously heavy volume of 200,000 Island shares. The fact that someone was snapping up the penny stock in such large chunks suggests that someone might know something in front of an impending announcement. There's no solid information available to support that speculation and the buying died down by midsession, with NCSS trading close to unchanged at 32 cents.

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For those who like more solid, meat-and-potato stock news, GTSI (GTSI Quote) announced at 5:30 p.m. EDT that it was awarded a U.S. defense contract worth $857.2 million. It popped $2.61, or 77% to $5.99.

GTSI is a business-to-government marketer of microcomputer and Unix workstation hardware, software and networking products to the federal government. It won a Defense Department contract for worldwide military government and communications work.

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After the bell biopharmaceutical company Geron (GERN Quote) announced that it might have identified an enzyme that cancer cells use to keep themselves "immortal." This information is a step toward creating a universal cancer vaccine, researchers at Duke University in North Carolina and Geron said. Geron rallied 10.87, or 37%, to $39.75 on the news.

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Medical-device manufacturer Gliatech(GLIA Quote) fell 59% during the day session on news that it called off its $203 million merger plan for with Guilford Pharmaceuticals (GLFD Quote). The companies added that Gliatech needs to focus on regulatory and product development concerns. GLIA continued to fall 51 cents, or 5%, to $9.67 on Instinet.

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Cyber-Care (CYBR Quote) got some major league respect after an Ivy League announcement. The medical device firm said late in the day session that it will partner with Yale University on a pilot program for Cyber-Care's electronic house-call system, an online medical monitoring product. CYBR gained 58.9% before the bell but lost 62 cents, or 8.6%, to $6.62 on 76,000 Instinet shares.

10 most active stocks on Instinet (6:30 p.m. EDT)
Company	Price	Change	Session Volume
GTSI (GTSI Quote)	6.2031	-2.8282	261,500
Lattice Semiconductor (LSCC Quote)	71.3125	-0.0625	126,700
Microsoft (MSFT Quote)	71.25	+0.3125	123,309
Intel (INTC Quote)	74.45375	+0.375	107,949
Western Resources (WR Quote)	19.50	--	107,300
VA Linux (LNUX Quote)	45	+0.0625	84,900
Devon Energy (DVN Quote)	60.75	-0.0625	84,346
Dell (DELL Quote)	40.75	+0.1875	82,535
Cyber-Care (CYBR Quote)	6.625	-0.625	76,800
Nextel (NXTL Quote)	48.375	--	69,600

This information is provided by Instinet, a wholly owned subsidiary of Reuters (RTRSY Quote). For further information, please contact Instinet at www.instinet.com.

10 most active stocks on Island ECN (8 p.m. EDT)
Company	Price	Change	Session Volume
GTSI (GTSI Quote)	5.99	+2.615	1,209,589
Compositech (CTEK Quote)	0.53	+0.1563	669,086
FOCUS Enhancements (FCSE Quote)	1.50	-0.0625	475,221
Fusion Networks (FUSN Quote)	1.25	-0.375	346,528
Cyber-Care (CYBR Quote)	6.6563	-0.5938	330,636
NCS HealthCare (NCSS Quote)	0.32	+0.0075	203,244
American Champion Entertainment (ACEI Quote)	1.125	+0.0625	196,398
Gliatech (GLIA Quote)	9.6875	-0.5	74,288
Crossroads Systems (CRDS Quote)	12.25	+0.375	68,631
Aastrom Biosciences (ASTM Quote)	3.60	+0.4438	43,332

Island ECN, owned by Datek Online, offers trading, mainly in Nasdaq-listed stocks, from 7 a.m. to 8 p.m. EDT.

Confused? TheStreet.com explains how the rules change when the sun goes down in Investing Basics: Night Owl, a section devoted to after-hours trading.