Russell 2000 trims morning losses
The Russell 2000 (NYSE:IWM) has pared some of its earlier losses as investors take a second look at economic and financial data.
At 11:48 a.m. ET, the small-cap index was down 0.70 points, or 0.10%, to 687.46. The Dow Jones Industrial Average was off 21.90 points, or 0.18%, to 12,303.52.
Small-cap stocks began the session lower but have since been moving erratically, twice briefly venturing into the green, as investors try to make sense of mixed news.
The major bearish news came before the start of trading when Wachovia Corp. (NYSE:WB), the fourth-largest U.S. bank, reported that it swung to a first-quarter loss. The Charlotte, N.C.-based company also cut its dividend and said that it will sell common and preferred stock to raise capital.
The announcement led to declines in the financial services sector. Among those whose stock price is sagging is small-cap multi-bank holding company GB&T Bancshares, Inc. (Nasdaq:GBTB).
Similarly, shares of Jasper, Ga.-based Crescent Banking Co. (Nasdaq:CSNT) are also in the red.
The negative financial news was somewhat offset an hour before the start of trading when the U.S. Census Bureau reported that U.S. retail sales unexpectedly rose 0.2% in March. Economists were expecting sales to stay flat.
However, the increase is due to strong sales at gasoline stations, which jumped 1.1%. Purchases excluding gasoline fell 0.3%.
A separate report by the Census Bureau released after the opening shows that business inventories rose a more-than-expected 0.6% in February to $1,468.4 billion. Rising inventories are a sign of a slowing economy.
Iron and steel companies are currently the worst-performing industry group. Among the losers are small-caps Universal Stainless & Alloy Products, Inc. (Nasdaq:USAP) and Wheeling, W.Va.-based Esmark Inc. (Nasdaq:ESMK).
