Small caps fall on economic data
The Russell 2000 (NYSE: IWM) is in negative territory following news of poor economic data.
At 10:11 a.m. ET, the small-cap index was missing 6.07 points, or 0.85%, to 710.37. The Dow Jones Industrial Average (INDU) was down 96.39 points, or 0.76%, to 12,597.89.
The U.S. Commerce Department reported before the opening that it has reaffirmed its initial estimate for fourth-quarter economic growth of 0.6% at an annual rate. Economists were expecting an upward revision to 0.8%. The economy grew 4.9% during the third quarter.
The price index for personal consumption increased 4.1%, compared with the previously estimated 3.9%. That’s a worrying sign that inflation is not moderating despite the slowing economy.
Separately, the U.S. Labor Department said that jobless claims for the week ended Feb. 23 were 373,000, a larger-than-expected increase from the preceding week’s upwardly revised level of 354,000.
Small-cap stocks are moving down, with PharmaNet Development Group Inc. (Nasdaq: PDGI) being among the top losers.
The Princeton, N.J.-based drug development services company reported fourth-quarter earnings above analysts’ expectations, but is suffering due to its disappointing full-year 2008 forecast.
Investment bank Cowen Group, Inc. (Nasdaq: COWN) is also in the red following news that it reported a fourth-quarter net loss and saw its revenues decline 39%.
Meanwhile, Power Medical Interventions, Inc. (Nasdaq: PMII), a maker of medical devices, said that sales for the three months ended Dec. 31, 2007 were $1.9 million, compared with $1.8 million a year earlier.
