Russell 2000 maintains gains
The Russell 2000 (NYSE:IWM) is holding on to its earlier gains on news that a major savings and loan company could get a $5 billion cash infusion.
At 12:31 p.m. ET, the small-cap index was up 4.67 points, or 0.65%, to 718.40. The Dow Jones Industrial Average had added 94.77 points, or 0.75%, to 12,704.19.
Washington Mutual Inc. (NYSE:WM) is near a deal to receive a $5 billion boost from a private equity group, according to news reports before the opening. The Seattle, Wash.-based savings and loan company is in final negotiations to receive an investment that will help it deal with liquidity issues stemming from the subprime mortgage meltdown.
Small-cap stocks opened in the green and have been in positive territory ever since. The bulls were undeterred by news after the opening that the U.S. economy is sliding into a recession, according to Martin Feldstein, head of the National Bureau of Economic Research.
Among the winners is orthopedic products maker Orthofix International N.V. (Nasdaq:OFIX), which is rebounding after its stock declined on Friday on news that its CFO Timothy Adams has resigned.
“Management is performing a radical overhaul of OFIX’s businesses,” wrote Michael Matson, a senior analyst with brokerage house Wachovia Capital Markets, in a research note published today. “This will require divestitures and acquisitions. In the long run, this should lead to multiple expansion and share appreciation though the ride may be bumpy at times.”
Matson is maintaining the stock’s “outperform” rating.
