Russell 2000 loses 1.5%
The Russell 2000 posted the biggest loss among the major U.S. indices as stocks hit the skids following a rise in government bond yields. The Russell 2000 lost 12.16 points, or 1.43%, to finish at 836.18. The Dow Jones Industrial Average dropped 146.00 points, or 1.07%, to 13,489.42.
Stocks started heading down this afternoon as investors reacted to a rise in the yield of the 10-year Treasury bond. The yield ended the day at 5.146%, above Tuesday’s close of 5.081%. Bond yields first broke through the 5% barrier two weeks ago.
Bond yields help determine rates on loans and mortgages, and an increase suggests that interest rates might move up, making borrowing more difficult and slowing down the economy.
The markets got off to a neutral start following news that New York-based financial services giant Morgan Stanley (NYSE: MS) increased its second-quarter net income 40%, while revenue jumped 32%.
Among specific small-cap companies:
Shares of FSI International, Inc. (Nasdaq: FSII), which makes equipment used in the fabrication of microelectronics, fell on news of a wider quarterly loss. The net loss for the three months ended May 26 was $5.6 million, or $0.19 per share, compared with a net loss of $2.4 million, or $0.08 per share, during the analogous quarter of fiscal 2006, the Chaska, Minn.-based company reported after Tuesday’s close. Analysts were looking for a loss of $0.12 per share. CEO Don Mitchell said the company’s difficulties will last for a few more quarters. The stock shed $0.55, or 14%, to close at $3.43.
3D Systems Corp. (Nasdaq: TDSC) lost ground on news that the maker of 3-D manufacturing systems and related products will sell 1.25 million of its shares to investors at a price of $17.50 per share. Proceeds will come to about $20.56 million, which will be used to launch a new product and support growth initiative, the Rock Hill, S.C.-based company said before the opening bell. The stock fell $1.16, or 5%, to end at $23.83.
Shares of Coley Pharmaceutical Group Inc. (Nasdaq: COLY) were among the biggest losers today, dropping $5.03, or 59%, to $3.46, following an announcement this afternoon that pharmaceutical giant Pfizer Inc. (NYSE: PFE) has discontinued developing the lung cancer drug Promune, which was invented by Coley. An independent committee reviewed data from two studies of the drug and decided that it had little therapeutic effect. Wellesley, Mass.-based Coley had already received $50 million from Pfizer in licensing fees and stood to receive as much as $455 million in future payments.
