Russell 2000 rebounds
The Russell 2000 (NYSE:IWM) is posting solid gains after recovering from its earlier losses.
At 11:23 a.m. ET, the small-cap index had added 3.94 points, or 0.55%, to 714.59. The Dow Jones Industrial Average was up 10.18 points, or 0.08%, to 12,664.54.
Small-cap stocks began moving sharply higher and broke into positive territory at about 10:30 a.m. ET, despite news of U.S. Federal Reserve chairman Ben Bernanke’s generally pessimistic testimony in front of the congressional Joint Economic Committee.
“It now appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly,” Bernanke said. News of the bearish assessment was largely responsible for stocks opening in the red.
The Fed chief also said that disposable-income growth has slowed while inflation has remained a concern; however, the economy could improve later in 2008.
“We expect economic activity to strengthen in the second half of the year, in part as the result of stimulative monetary and fiscal policies,” Bernanke said. Some observers interpret that as a sign that the U.S. central bank will not move to lower interest rates further.
In economic news, the U.S. Census Bureau reported after the opening that factory orders fell more than expected in February.
Tobacco companies are currently the worst-performing industry group. Shares of small-cap Star Scientific, Inc. (Nasdaq:STSI), which works to reduce the level of toxins in tobacco, are flat.
On the flip side, companies offering printing services are the best-performing industry group. Among the winners is New York-based Bowne & Co., Inc. (NYSE:BNE), along with commercial printer and office products supplier Champion Industries, Inc. (Nasdaq:CHMP).
