Small-cap stocks trailed the major indices Thursday, as the Russell 2000 Index was down 4.7% to 765.36, and the S&P SmallCap 600 Index lost less than 1% to 396.71. Retailers reporting earnings played a large role in today's losses. Case in point was Charlotte, N.C.-based Cato ( CTR). Fiscal third-quarter income was cut in half year over year to $2.9 million, or 9 cents a share, but beat analyst estimates by a penny a share. Same-store sales, or sales from stores open a year or more, were down 5% from 2006, and the gross margin rate decreased to 31% from 32% last year. Shares of the women's wear retailer plummeted 25% to $14.70. Also smarting was Stein Mart ( SMRT), shares of which dropped 11% to $5.39 as the Jacksonville, Fla.-based fashion retailer announced a third-quarter loss of $2.7 million, or 6 cents a share, compared to a gain of $237,000, or a penny a share, in 2006. Analysts were projecting a loss of 7 cents a share. Comparable-store sales dropped 6.3% from last year. Stein Mart also guided for a sequential same-store sales decrease of 10% for the fourth quarter. Both Cato and Stein Mart noted that their most recent quarters were 13 weeks long, one week shorter than the corresponding quarter last year. Slipping along with the other retailers, Hudson, Ohio's Jo-Ann Stores ( JAS) fell 14% to $17.71. Jo-Ann reported fiscal 2008 third-quarter profit of $8 million, or 32 cents a share, vs. $100,000, or zero cents a share, a year ago to beat analyst estimates by 4 cents. Same-store sales increased 2.4%, compared with a decrease of 5.4% in the year-ago quarter. Guidance for fiscal 2008 was conservative, however, pointing to uncertainty in consumer spending and projecting EPS between 55 cents and 65 cents, down from 60 cents to 70 cents.
On the winning side, online jewelry auctioneer Bidz.com ( BIDZ) rebounded from yesterday's large loss, as shares gained 15% to $11.62. The Culver City, Calif., company announced it had begun investigating wrongdoing by Citron Research editor Andrew Left, who had on Monday issued a report that alleged misconduct by Bidz and sent shares spiraling. Bidz additionally expressed concern that recent selling of its stock may have violated federal security laws, and the company will report trading activity to the Securities and Exchange Commission. Also blasting ahead on a slew of good news, TiVo ( TIVO) shares climbed 25% to $7.48 after the company issued a third-quarter earnings following Wednesday's close. The maker of television-enhancement technology reported a loss of $8.2 million, or 8 cents a share, vs. a loss of $11.1 million, or 12 cents a share, a year ago. The Street was expecting an EPS loss of 13 cents. The stock's rise was further bolstered by a ratings upgrade by JP Morgan to overweight from underweight. In addition, the U.S. Patent Office ruled today in TiVo's favor regarding its patent infringement case against EchoStar ( DISH).