Russell 2000 continues in the red
The Russell 2000 (NYSE: IWM) is down despite a brief climb into positive territory on news of a plan to bring relief to struggling homeowners. At 2:43 p.m. ET, the small-cap index had lost 3.89 points, or 0.51%, to 763.88. The Dow Jones Industrial Average (INDU) had retreated 43.74 points, or 0.33%, to 13,327.98.
The U.S. Treasury Department is working on a plan to ease the pain of borrowers with subprime adjustable-rate mortgages, Treasury Secretary Henry Paulson said in a speech after the start of trading.
Paulson has been working with members of the mortgage industry on a plan that would help borrowers by freezing their introductory interest rates instead of having them reset to higher rates after a certain period of time, the way it is now. One of the issues currently in discussion is the length of the freeze.
A complete relief package has not yet been hammered out, while Paulson, who was speaking at an event organized by the Treasury Department’s Office of Thrift Supervision, did not give specifics on when a final agreement would be reached.
However, some observers expect a deal to be reached later this week.
Stocks reacted positively to the news, with the Russell 2000 posting gains shortly before 1 p.m. ET, only to fall down again. The Dow stayed in the green for longer before also succumbing to the bearish pull.
In other news, U.S. manufacturing continued to expand in November, but at a slower pace. The Institute for Supply Management’s manufacturing index fell to 50.8 from 50.9 in October. A reading above 50 indicates an expansion.
The slowdown, which confirms expectations of a decline in U.S. economic growth in the fourth quarter of 2007, would have been steeped had it not been for a rise in manufacturing exports and orders.
Elsewhere, the price of oil has added $0.74 to $89.45.
Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• Gevity HR, Inc. (GVHR), up 19% on news of an analyst upgrade.
• Clean Diesel Technologies, Inc. (CDTI), up 28%. A company representative was not available for comment.
• Penford Corp. (PENX), up 13%.
Biggest percentage losers:
• ParkerVision, Inc. (PRKR), down 17% after a weekend news article questioned the viability of its technology.
• Targacept Inc. (TRGT) down 18% on news its pain treatment drug candidate failed in a midstage study.
• Security Capital Assurance Ltd. (SCA), down 16%.
