Russell sags as stocks rise
The Russell 2000 (NYSE: IWM) is languishing in the red while the Dow Jones Industrial Average (INDU) and the other major U.S. indices are higher on good economic news and an upgrade of General Motors.
At 10:17 a.m. ET the small-cap index had shed 2.21 points, or 0.28%, to 775.69. The Dow was up 99.50 points, or 0.75%, to 13,391.15.
The number of Americans filing for jobless benefits increased a smaller-than-expected 4,000 to 319,000 for the week ended September 8, the U.S. Labor Department reported before the opening bell. Economists were expecting jobless claims to hit 325,000.
Contributing to the bullish sentiment at the start of trading was news that General Motors Corp. (NYSE: GM), a Dow component, received an analyst upgrade. Citi Investment Research, the research arm of financial services giant Citigroup Inc. (NYSE: C) recommended as a “buy” shares of the Detroit-based automaker.
Citi said the stock price could potentially double should United Auto Workers, one of the largest labor unions in the United States, agree to support a union-managed health-care fund.
However, holding the bulls back is news that the global credit squeeze has increased the risks to economic growth, according to the European Central Bank. In its monthly bulletin, the ECB warns that the recent financial turmoil could have negative implications for the global economy.
However, the ECB, which controls the monetary policy for the 13 countries of the European Union that have adopted the euro, writes that fast growth in emerging economies is helping keep global economic activity strong.
Overseas, Japan’s Nikkei 225 added 0.2%, while the United Kingdom’s FTSE 100 climbed 0.8%.
