Russell 2000 rebounds cautiously
The Russell 2000 (NYSE: IWM) has recovered from earlier losses and is now above its starting position.
At 12:57 p.m. ET, the small-cap index had added 0.84 points, or 0.12%, to 699.74. The Dow Jones Industrial Average (INDU) was up 36.83 points, or 0.30%, to 12,218.96.
Stocks small and large have turned the corner despite a bearish start due to more credit problems stemming from the stagnating U.S. housing sector.
Insurer American International Group Inc. (NYSE: AIG) announced before the start of trading that it may have to write off billions in mortgage debt. The New York-based company said in a regulatory filing that it would need to change the way it values its credit default swaps involving collateralized debt obligations.
The Russell 2000 opened in positive territory but slipped within minutes.
Elsewhere, Sunnyvale, Calif.-based Yahoo! Inc. (Nasdaq: YHOO) reported before the opening that it will reject a $42 billion takeover bid from Microsoft Corp. (MSFT), arguing that the offer is too low. Analysts expect that Microsoft will sweeten its bid.
The small-cap index managed to rebound after falling to a level of 691 at about 10:15 a.m. ET, rising above the flat line at about 12:40 p.m. ET.
Shares of companies manufacturing basic materials such as fabricated plastic and rubber are among the biggest gainers thus far, and small-cap Quixote Corp. (Nasdaq: QUIX) is among them.
The Chicago-based maker of highway and transportation safety products announced before the start of trading that it will donate a portion of its 2008 sales to families of highway workers who have been killed or permanently disabled.
But Quixote’s modest bump in share price can’t be compared with the 30% jump in Possis Medical, Inc.’s (Nasdaq: POSS) stock.
The Minneapolis-based cardiovascular products maker will be acquired by an affiliate of German health-care and medical products giant Bayer AG for $19.50 per share, or $361 million.
“Our shared history of innovation bodes well for product development beyond our core businesses, and provides tremendous opportunity for growth for our business and employees,” said president and CEO Robert Dutcher in a statement.
While Possis is gaining, LCA-Vision Inc. (Nasdaq: LCAV) is seeing red.
The Cincinnati, Ohio-based laser vision correction services provider reported that its fourth-quarter profit declined and announced that it will trim jobs.
