Small caps continue sagging
The Russell 2000 (NYSE:IWM) is trading in the red as investors focus on corporate earnings. At 2:32 p.m. ET, the small-cap index was missing 12.32 points, or 1.73%, to 699.60. The Dow Jones Industrial Average was down 90.13 points, or 0.72%, to 12,486.31.
Stocks small and large are in negative territory as investors worry that earnings will be hurt by the current economic slowdown. United Parcel Service, Inc. (NYSE:UPS) reported after the close on Tuesday it has lowered its first-quarter profit forecast. The Atlanta, Ga.-based company is considered a bellwether because the strength of its business is closely related to the overall health of consumers and businesses.
More bearish news came after the start of trading following news reports that investment bank Merrill Lynch & Co., Inc. (NYSE:MER) will likely post a first-quarter loss due to its exposure to subprime loans and commercial real-estate debt.
Separately, the Mortgage Bankers Association reported before the opening that its measure of mortgage loan application volume fell 5.4% for the week ended April 4.
Among the small-cap losers is The Greenbrier Companies, Inc. (NYSE:GBX). Shares of the railroad freight car equipment maker are on track to close lower on news before the start of trading that second-quarter revenue rose but missed analysts’ projections.
“This has been a very active quarter,” CEO William Furman said in a conference call. “We are disappointed in the quarter’s results, but I believe in light of the activities that were sustained during the last two quarters, these results are understandable.”
