Russell 2000 falls on weak economy
The Russell 2000 (NYSE: IWM) is lower on economic news that makes a recession more likely. At 1:13 p.m. ET, the small-cap index had declined 0.71 points, or 0.10%, to 685.47. The Dow Jones Industrial Average (INDU) was down 22.47 points, or 0.18%, to 12,243.92.
A recession seems more likely now, following reports showing a decline in construction spending and manufacturing.
Factory activity fell to 48.3 in February from 50.7 in January, the Institute for Supply Management reported after the start of trading. Economists were expecting to see a steeper decline. Readings below 50 indicate a contraction.
Meanwhile, the U.S. Census Bureau reported after the opening that construction spending fell more than expected in January, its forth consecutive drop. The numbers show a 1.7% monthly decline to a seasonally adjusted annual rate of $1.121 trillion. Residential construction is down the most, reflecting the ongoing stagnation in the U.S. housing sector.
On a year-over-year basis, total constriction spending is down 3.3%.
Shares of Clearwire Corp. (Nasdaq: CLWR), which builds and operates wireless broadband networks that enable Internet communications, have added 3%.
“The competitive landscape for communication services is intense,” wrote Eric Kainer, an analyst with investment bank ThinkEquity Partners, in a research note today. “Clearwire operates in over 50 markets and plans to expand quickly into additional markets through 2012, adding risk.”
Kainer reiterated his “buy” rating and 2008 earnings estimate of $4.11 per share.
Meanwhile, shares of TASER International, Inc. (Nasdaq: TASR) are flat on news before the start of trading that the state of Delaware might move to restrict the use of tasers.
IKON Office Solutions, Inc. (NYSE: IKN) is also hugging the flat line on news before the opening that the Malvern, Pa.-based document management systems provider plans to repurchase $25 million in shares during the remainder of fiscal 2008.
Elsewhere, hedge fund Third Point LLC has decreased its stake in CV Therapeutics, Inc. (Nasdaq: CVTX) to 2.1% from 9.9%, according to a filing with the Securities and Exchange Commission after the close on Friday. Shares of the Palo Alto, Calif.-based company are up slightly.
