Russell heads deeper into the red
Small caps opened lower, extending losses seen on Friday. At 10:40, the Russell 2000 (NYSE:IWM) is down 15.09, or 3.37%, to 433.27. The Dow is down 3.15%, while the S&P 500 is 3.91% lower. This morning’s slide took the S&P 500 below the 800 level for the first time since the bear market low of Nov. 21 as financials and shares of big energy companies weighed.
General Motors Corp. (NYSE:GM) is down 12.8% ahead of its expected proposal out today with Chrysler LLC. The companies plan to submit the details to the Obama administration to illustrate that the two battered automakers can return to profit. The proposal aims to cut jobs and pare brands, among other things, in hopes of securing billions of dollars in additional federal aid that the companies say they will pay back. General Motors is asking for another $4 billion on top of the $9 billion it has already received, while Chrysler wants another $3 billion on top of the already borrowed $4 billion.
President Obama is scheduled to sign the $787 billion stimulus bill into law today, and is set to detail a plan on Wednesday to help stem mortgage foreclosures. By the losses Wall Street has seen this morning, it seems investors have already priced the Obama news into the market and are looking for steadier direction.
Crude dropped nearly 7%, or $2.66, to $34.98 a barrel this morning amid concern the deepening recession will sap energy demand. Small-cap oil companies Aegean Marine Petroleum (NYSE:ANW) is down 10.5%, while Harvest Natural (NYSE:HNR) and Cheniere Energy (AMEX:LNG) are both down nearly 10%.
Small-cap percentage gainers this morning include StemCells, Inc. (Nasdaq:STEM), up 13.7% on heavy volume, and Retalix Limited (Nasdaq:RTLX), up 16% after receiving an acquisition offer. On the downside, Talbots (NYSE:TLB) is down nearly 30% following news late last week that the small-cap retailer will cut 370 jobs, or 17% of its work force, to reduce costs by $150 million.
