Russell climbs into the green midday
After opening lower, the Russell 2000 (NYSE:IWM) climbed into positive to flat territory midday, ahead of the Federal Reserve’s FOMC meeting Tuesday and Wednesday and the preliminary reading of first-quarter GDP.
At 11:52 a.m. ET, the Russell was up 1.76, or 0.24%, at 723.6, while the Dow gained 6.68, or 0.05%, to 12,898.54.
The Fed is expected to shave another 25 basis points off the federal-funds rate Wednesday, however Wall Street will watch to see if the central bank will pause its loosening monetary policy campaign after this week, as the economy confronts inflation.
Also this week, Wednesday serves up first quarter preliminary GDP, in which investors will be watching to see if the economy slipped into negative growth.
On the opening, the market found support on news that Mars Inc. and Warren Buffet’s Berkshire Hathaway (NYSE:BRK) were acquiring Wrigley (NYSE:WWY) for a reported $22 billion to $23 billion. Buffet said his stake was $6.5 billion and that he was acting as a financing agent for the deal. From a broad market standpoint, merger and acquisition activity helps suggest that the worst of the credit crunch may be in the market’s rear view mirror. Wrigley shares were up roughly 23% midday.
Additionly, Kirk Kerkorian’s Tracinda Corp. said it would purchase 20 million shares of Ford Motor Co. (NYSE:F) at $8.50 a share, which was up $1 from Friday’s close. Ford shares were up about 10% midday.
In commodities news, oil continued to flirt with the $120 level, hovering in the $119 range midday, while gold gained $7.80 to $897 an ounce. The greenback was lower against the yen and the euro.
Shifting to the broader market sectors, the construction and agriculture machinery industry group led midday, while the office supplies industry group took the worst beating of the day.
Among individual small-cap shares, on the up side, Origin Agritech Ltd. (Nasdaq:SEED) was up 15%, while Colonial Bankshares Inc. (Nasdaq:COBK) was up 13%. On the downside, Silicom Ltd. (Nasdaq:SILC) tumbled 27% midday, while Image Sensing Systems Inc. (Nasdaq:ISNS) lost 11% and Radware Ltd. (Nasdaq:RDWR) slipped 13% after reporting a wider-than-expected first-quarter loss and lower revenues this morning.
