Russell 2000 futures drop
The Russell 2000 (NYSE: IWM) futures are lower and the small-cap index will open with a decline.
Small-cap stocks are set for a bearish opening following news that insurance giant American International Group, Inc. (NYSE: AIG) suffered the biggest quarterly loss in its history. The New York-based company had to write down over $11 billion in losses related to subprime mortgages, contributing to a net loss of $5.29 billion, or $2.08 per share.
Elsewhere, the U.S. Commerce Department reported this morning that spending increased 0.4% in January, while personal income added 0.3%. Economists were expecting smaller increases.
The same report showed that a measure of inflation is just above the U.S. Federal Reserve’s preferred year-over-year range.
In what has become a familiar refrain, small cap stocks retreated in the shadow of a double top formation on daily charts Thursday – the third time this has happened during the month of February, which is quite unusual. The Russell 2000 closed down 10.72, or 1.50% at 705.72.
The market faces some mild economic data risk this morning. The Chicago Purchasing Manager’s information is out at 9:45 a.m. ET and Michigan sentiment figures at 10:00 a.m. ET. The market needs to stabilize above 700 ahead of the weekend, with initial support just below at 702, then at 694 and 688. Meanwhile, resistance is at 712, but the big test is up at 723.50.
Here are the biggest percentage gainers and losers in pre-market trading among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• Jazz Pharmaceuticals, Inc. (JAZZ), up 15% on news the U.S. Food and Drug Administration has approved its social anxiety disorder drug.
• Internap Network Services Corp. (INAP), up 8% on news that fourth-quarter earnings beat expectations.
• Town Sports International Holdings, Inc. (CLUB), up 8% on news that fourth-quarter profit fell but still beats expectations.
Biggest percentage losers:
• Shiloh Industries, Inc. (SHLO), down 7%.
• Shengdatech, Inc. (SDTH), down 6%.
• DRDGOLD Ltd. (DROOY), down 5%.
Kevin Pendley contributed to this report.
