An early rise for small caps
The Russell 2000 (NYSE: IWM) and the Dow are rising on news of an upward revision in fourth-quarter productivity.
At 10:13 a.m. ET, the small-cap index had added 4.78 points, or 0.70%, to 685.76. The Dow Jones Industrial Average (INDU) was up 92.89 points, or 0.76%, to 12,306.69.
Stocks are on the green on news that U.S. productivity for the fourth quarter of 2007 was revised up. The U.S. Commerce Department reported before the start of trading that business productivity grew 1.9% at an annualized rate, above the initial estimate of 1.8%. Economists were not expecting an upward revision.
Hours worked fell 1.6% as businesses reduced employees’ hours in order to save money.
But a bearish report by payroll services provider Automatic Data Processing, Inc. (NYSE: ADP) is holding the bulls back. The Roseland, N.J.-based company said before the opening that private employers cut 23,000 jobs in February, the biggest drop in nearly five years.
Employment is seen as a lagging indicator and the decline tells us that the labor market is softening as economic growth is slowing.
Small-cap stocks are higher, with retailers leading the charge.
Shares of PC Mall Inc. (Nasdaq: MALL), which markets computer hardware and software, are higher, as are shares of Salt Lake City-based closeout retailer Overstock.com, Inc. (Nasdaq: OSTK).
Elsewhere, Maidenform Brands Inc. (NYSE: MFB) reported after the close on Tuesday that its fourth-quarter profit jumped 97% to $6.4 million, or $0.27 per share, from $3.2 million, or $0.13 per share a year earlier. Shares of the intimate apparel products company have added about 20%.
