Small caps open higher after Wednesday’s rout
Small-cap stocks opened higher following Wednesday’s rout, which ended with a 4.8% drop in the index to the lowest daily close since July 15. At 10:06 a.m. ET, the Russell 2000 (NYSE:IWM) was up 1.48, or 2.18%.
News that the U.S. Federal Reserve and other major central banks around the world pumped billions of dollars into the global financial system was supportive, but uncertainty about the shaky U.S. financial system remained. Gold continued to strengthen after Wednesday’s record spike, while Treasury prices eased.
Before the opening the U.S. Labor Department said the initial jobless claims rose to a seasonally adjusted 455,000, up 10,000 from the previous week. Analysts were looking for a slight drop in claims; the government attributed the rise to the impact of Hurricane Gustav.
Shortly after the opening bell, SurModics Inc. (Nasdaq:SRDX) was down nearly 25% to $29.49 following news after the close Wednesday that Merck & Co., Inc. (NYSE:MRK) said it is discontinuing a license and research collaboration agreement the companies signed in June 2007.
