Russell 2000 falls further
The Russell 2000 (NYSE: IWM) has extended its earlier losses following news that the outlook for the U.S. economy has worsened, according to U.S. Federal Reserve chairman Ben Bernanke.
At 12:12 p.m. ET, the small-cap index had declined 12.98 points, or 1.80%, to 708.95. The Dow Jones Industrial Average (INDU) was down 99.41 points, or 0.79%, to 12,452.83.
“The outlook for the economy has worsened in recent months, and the downside risks to growth have increased,” Fed chairman Ben Bernanke told the Senate Banking Committee this morning.
However, Bernanke made sure to point out that he is not predicting a recession.
“My baseline outlook involves a period of sluggish growth, followed by a somewhat stronger pace of growth starting later this year as the effects of monetary and fiscal stimulus begin to be felt.”
The Fed chief also said that the U.S. central bank stands ready to lower its target federal funds rate again if necessary.
Treasury Secretary Henry Paulson, who is testifying alongside Bernanke, also told lawmakers that he believes the economy will avoid recession in 2008.
The Russell 2000 has been sliding continuously ever since the joint testimony began at 10 a.m. ET.
Among the biggest small-cap losers is clinical software provider Allscripts Healthcare Solutions, Inc. (Nasdaq: MDRX), which reported fourth-quarter revenue below analysts’ estimates.
Shares of Astronics Corp. (Nasdaq: ATRO), which supplies lighting, electronics and power distribution systems, are dimmer on news that its fourth-quarter net income of $0.24 per share disappointed analysts expecting $0.31 per share.
On the flip side, Lake Mary, Fla.-based FARO Technologies, Inc. (Nasdaq: FARO) reported a fourth-quarter profit that beat analysts' projections.
