IntercontinentalExchange, Inc. (ICE) reported its third quarter results yesterday.

The company swung to a GAAP net income of $86.9 million or $1.18 per share from a net income of $75 million or $1.04 in the year-ago period. Results came in 3 cents ahead of the Zacks Consensus Estimate of $1.15.

The quarterly results benefited from position limitations on speculators, sweeping regulatory reforms, lower expenses and record futures trading. The upside was also attributable to growth in the company’s core businesses, significant progress from new initiatives and stronger margins.

The company could benefit as more over-the-counter contracts are exchange-traded and cleared, but could suffer if U.S. regulators impose new commodity-market position limits.

Net revenues increased 27.2% year over year to $256.3 million. The growth was primarily attributable to 34% increase in consolidated transaction and clearing fee revenues in the quarter driven primarily by new products, strong trading volumes in ICE's futures and OTC energy segments, continued

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This article is adapted from the latest edition of U.S. Global Investorsrsquo; Weekly Investor Alert, published each Friday and distributed free to subscribers. Click here to view the entire Investor Alert. The stock market has been on a tear since bottoming out in early March 2009, with the strongest performance being seen in small-cap stocks. The Nasdaq, heavy with small-cap companies, was up 65 percent through last Fridayrsquo;s close from the March 9 low, while the large-cap-loaded Samp;P 500 Index and Dow Jones Industrial Average had gained 54 percent and 47 percent, respectively, over the same period. The two charts from RBC Capital Markets below drill down deeper into the inverse relationship between market cap and performance over the past six and a half months. Figure 1 ranks the performance by capitalization benchmark from the March low through the market close on September 23. Leading the way is the Russell Microcap Index (2,000 small-company ...

This article is adapted from the latest edition of U.S. Global Investorsrsquo; Weekly Investor Alert, published each Friday and distributed free to subscribers. Click here to view the entire Investor Alert. The stock market has been on a tear since bottoming out in early March 2009, with the strongest performance being seen in small-cap stocks. The Nasdaq, heavy with small-cap companies, was up 65 percent through last Fridayrsquo;s close from the March 9 low, while the large-cap-loaded Samp;P 500 Index and Dow Jones Industrial Average had gained 54 percent and 47 percent, respectively, over the same period. The two charts from RBC Capital Markets below drill down deeper into the inverse relationship between market cap and performance over the past six and a half months. Figure 1 ranks the performance by capitalization benchmark from the March low through the market close on September 23. Leading the way is the Russell Microcap Index (2,000 small-company ...

Growth and value investing has been on life support for a long time now. Last year, someone finally pulled the plug.

A quick search of the ETF database will show you something quite telling—71 ETFs are dedicated to a slice of the market self-defined as either “growth” or “value.” That’s nearly 10 percent of the U.S. ETF market.

But honestly, why?

First, there’s a definitional issue. Russell (just to pick one index provider) defines their growth and value universe based on two characteristics: price-to-book and “projected growth” based on IBES (Institutional Brokers’ Estimate System) consensus estimates. This very distinction makes the indexer in me cringe. By taking the market and slicing it into buckets, and then picking one, investors are fundamentally picking stocks, and I still believe that rarely makes sense.

Let’s take a look under the hood at one family of growth and value: the iShares Russell 3000 series.

 

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The National Association of Realtors released data indicating a 2.7 percent decline in home sales for August. This was a surprise to many investors after a 4 month upturn in home sales figures and a 7.2 percent increase in July.

These surprising results heighten the anticipation of a coming end to the $8,000 tax credit for new homeowners expiring at the end of November. The Fed said on Wednesday that it would begin reducing purchases of mortgage-backed securities and that it would extend the program into the beginning of next year. While nationwide home sales are up and the inventory of unsold homes has dropped notably, sales are still down roughly 30 percent from the peak 4 years ago.

Commodities prices also fell sharply indicating that fears about disintegrating monetary fundamentals may be justified. In addition, Labor Department statistics clearly show a flagging job market despite conclusions regarding a 3

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Michael Dueker is Head Economist for North America at Russell Investments and a member of the Blue Chip forecasting panel. In February of 2008 he warned Econbrowser readers that it appeared unlikely that the economy was going to escape the slowdown without a recession. In December of 2008, he predicted in this forum that the recession would last until July or August of 2009, but that employment growth would not resume until March of 2010.

With that track record, we were very interested to learn the latest macroeconomic predictions stemming from Russell's Business Cycle Index, subject to the disclaimer that the content does not constitute investment advice or projections of the stock market or any specific investment.

Current business cycle estimates suggest the economy was out of recession by August 2009; an anemic recovery and a false threat of a double dip await

Michael Dueker

The latent variable behind the

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Legg Mason Partners Capital A (SCCAX) seeks capital appreciation. It is non-diversified.

The fund invests primarily in equity securities of US firms ranging from small capitalization to large companies. It may also invest in equities of foreign issuers, as well as equity-linked and fixed-income securities.

Google Inc. (GOOG), Travelers Co.s Inc. (TRV) and Juniper Networks Inc. (JNPR) are among the fund’s key holdings.

Legg Mason Partners Mid Cap Core A (SBMAX) was incepted in September 1998. The investment seeks long-term growth of capital.

The fund invests in equity securities of medium-sized companies within the range of components of the S&P MidCap 400 index or the Russell Midcap index at the time of purchase. It follows a disciplined core investment strategy, combining in-depth fundamental and quantitative analysis.

The fund has been managed by Brian M. Angerame since May 2005. Angerame has over 14

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Now that the dust has settled on the annual Russell rebalance, let’s take a closer look at the shiny new indexes and see what they say about the market.

The total-market Russell 3000 Index has seen some sizable changes in its sector weightings, although the top 10 remain very much the same. Figure 1 shows the new 2009 sector weightings according to the Russell sector classification system. Not surprisingly, financial services is no longer the largest sector: It now takes second place to technology, which is weighted at 16.19% versus financials at 15.27%. In 2008, those sectors were reversed, with financials at 17.24% and tech at 14.19%.

 

Figure 1: Russell 3000 Sector Weights In 2009 & 2008

Sector

2009

2008

Technology

16.19%

14.19%

Financial Services

15.27%

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Micromet (MITI) has been added to the Russell 3000 Index as part of the annual reconstitution of the Russell indexes, which occurred on June 26, 2009.Russell indexes are widely used by investment managers and institutional investors for index funds and as benchmarks for both passive and active investment strategies. The Russell 3000 also serves as the U.S. component to the Russell Global Index, which Russell launched in 2007. We view the news as positive given the greater visibility as a result of the inclusion to the index. We believe several expected milestones in the next 6 months represent potential share price catalysts and maintain our Buy recommendation at current levels. Read the full analyst report on "MITI"Zacks Investment Research

 

The Russell indexes will go through an annual reconstitution tomorrow, June 26 which could add volatility to an otherwise normally quiet Friday summer session.

For a schedule of the annual reconstitution process go to the Russell indexes page (here). 

The annual reconstitution is a process wherein the Russell indexes are completely rebuilt to ensure that all market segments are accurately represented.  This rebuilding affects the Russell Global, Russell 3000, Russell 1000, Russell 2000, Russell Midcap, and Russell Microcap indexes. 

There are 430 changes in the Russell 3000 with 276 additions and 154 deletions.   Sectors most affected is the healthcare with a net addition of 52 stocks and energy with a net decrease of 14 stocks.  The financial sector leads both the list of additions (69) and deletions (-39). 

Here is the link to view the stocks affected by the

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