Russell 2000 sinks as bonds soar
U.S. stocks fell hard today as government bond yields reached a five-year high. The Russell 2000 again was the biggest loser, falling 11.46 points, or 1.38%, to 821.72. The Dow Jones Industrial Average lost 129.95 points, or 0.97%, to 13,295.01.
The 10-year U.S. Treasury note increased to 5.276%, the highest level in five years, on growing concerns that the Federal Reserve will not lower interest rates soon and might even consider an increase.
Globally, central banks seem poised to raise interest rates, putting the brakes on the easy money that has fueling stock market growth and driving much of the recent mergers and acquisitions activity.
India’s industrial production outpaced expectations in April, while China’s inflation in May reached the highest level in 27 months and the United Kingdom signaled it may consider making borrowing more difficult.
In the United States, a top U.S. Federal Reserve official said on Monday that inflation remains the central bank’s top concern.
Among specific small-cap companies:
Shares of Composite Technology Corp. (OTC: CPTC) ended the day in the shadows following news the Irvine, Calif.-based renewable and electrical energy company has completed a private placement of common stock to investors. The $20 million raised in proceeds will be used for working capital and general corporate purposes, the company said before the start of trading. Shares lost $0.07, or 6%, to $1.20.
Generex Biotechnology Corp. (Nasdaq: GNBT) was among the day’s top gainers after it was initiated with a “Market Outperform” rating, the Canadian company announced after the opening bell. Investment bank Rodman & Renshaw set the target price at $6 and reported that Generex’s oral insulin Oral-lyn could become a major player in the non-injectable insulin market and bring in over $600 million in revenues by 2013. Shares gained $0.54, or 43%, to close at $1.80.
Watertown, Mass.-based drug developer Acusphere, Inc. (Nasdaq: ACUS) has entered into definitive agreements with investors to raise $18.65 million in net proceeds through the sale of shares of its common stock and warrants, the company said before market open. The transaction is scheduled to close on June 15, 2007. Shares fell $0.25, or 10%, to $2.35.
