NEW YORK ( TheStreet) -- Small-cap stocks were participating in the market rally Tuesday, with the Russell 2000 Index up 0.6% in afternoon trading. Small-caps outperformed the market in 2010, as merger activity and faster profits drove stock prices higher.
Industrial plastic films producer Fuwei Films (FFHL) was the biggest gainer among small-caps on Tuesday, shooting up 28% to $4.15. The stock is up 66% over the past month. In September, the company settled a shareholder lawsuit that alleged promoters hyped the company's IPO in 2006 even as Chinese authorities were investigating three of its executives for illegally taking over control of the company.
The sharp appreciation in the stock in the last few months appears to have baffled even the company's management. In a press release on December 23, the company noted the stock's unusual price rise.
"We really appreciate our investors' continued interest and support of Fuwei Films," said Mr. Xiaoan He, CEO of Fuwei Films, "and while we are not currently aware of any information which we have failed to disclose, among the reasons that might have caused the recent rise in our market price other than the settlement of the class action litigation and the earnings release of the third quarter of 2010, we will continue to keep our investors informed."IP services company Interactive Intelligence (ININ) was soaring 24% to $36.35 after it issued a fourth-quarter outlook that was higher than forecast. The company now expects an adjusted profit of 48 cents to 52 cents for the fourth quarter against a consensus estimate of 31 cents. Small-cap energy stocks were seeing momentum with Evergreen Energy (EEE), Cred Petroleum (CRED), Sulphco (SUF) and Tri-Valley (TIV) among the big gainer on Tuesday's trading action. Talbots (TLB) was the biggest loser in the small-cap space on Tuesday, dropping 17% to $6.30 after it issued a weak outlook for its fourth quarter results. For the fourth quarter ending January 29, the retailer expects same-store sales to drop 6% and an adjusted loss of 15 to 19 cents, higher than an earlier forecast of a 5 cent loss to 3 cent profit. Israel-based Click Software (CKSW) was another stock that plunged on a weak fourth-quarter outlook. The company said after the bell Monday that a higher head count and a write-off will hurt its fourth quarter profit and cut its quarterly sales view. The company's forecast for sales of about $18 million fell short of analysts' estimates of $20 million, according to Thomson Reuters. Shares were sinking 15% to $7.91. Other small-caps that topped the loser's list Tuesday morning included Premier Exhibition (PRXI), Tuesday Morning (TUES), Brooklyn Federal Bancorp (BFSB) and ZBB Energy (ZBB) , with their stocks shedding between 14% and 17% of their value. --Written by Shanthi Bharatwaj in New York
>To contact the writer of this article, click here: Shanthi Bharatwaj. >To follow the writer on Twitter, go to http://twitter.com/shavenk. >To submit a news tip, send an email to: email@example.com.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV