Economy weighs down Russell 2000
The Russell 2000 (NYSE: IWM) is in negative territory and has lost more than the Dow on news reports that raise economic concerns.
At 12:31 p.m. ET, the small-cap index had declined 10.25 points, or 1.45%, to 695.07. The Dow Jones Industrial Average (INDU) was down 85.27 points, or 0.69%, to 12,291.71.
The bears are reigning supreme following news of economic reports that may hint inflation remains a concern despite lackluster economic growth.
The U.S. Labor Department reported that import prices jumped a more-than-expected 1.7% in January due to higher energy and food prices. The year-to-year rise in import prices was 13.7%, which is the biggest change since the measure was introduced in 1982.
The United States has long relied on cheap foreign imports to keep inflation in check, but the data on import prices suggest that may no longer be the case.
Adding to the economic worries was news the New York Federal Reserve said before the opening that its index of general business conditions fell to its lowest level since 2005.
That complicates the U.S. Federal Reserve’s task of keeping inflation low while simultaneously trying to stimulate the economy.
Separately, the Fed reported that industrial output rose 0.1% in January, matching expectations.
The small-cap index has been trending down out of the gate, occasionally recovering some lost ground with a brief spike. Coal companies are among the biggest losers, while airline companies are leading the winners.
Small-cap coal company National Coal Corp. (Nasdaq: NCOC), which sells bituminous steam coal from mines located in Tennessee and Kentucky, is seeing its shares fall more than 5%.
Shares of Evergreen Energy Inc. (NYSE: EEE) and Colorado Spring, Colo.-based Westmoreland Coal Co. (AMEX: WLB) are also in the red.
Meanwhile, shares of Frontier Airlines Holdings, Inc. (Nasdaq: FRNT) are taking off on news that the Denver-based provider of air transportation will be flying to eight new cities.
