Small caps fall on economic worries
The Russell 2000 (NYSE:IWM) closed lower as fears of a slowing economy and its ripple effects spooked investors. The small-cap index fell 0.76 points, or 0.11%, to 711.92. The Dow Jones Industrial Average let go 35.99 points, or 0.29%, to 12,576.44.
On a year-to-date basis, the Russell 2000 has shed 7.06%, while the Dow has declined 5.19% and the S&P 500 is down 7.00%.
“Some believed that a prolonged and severe economic downturn could not be ruled out given the further restriction of credit availability and ongoing weakness in the housing market,” thought members of the U.S. Federal Reserve, according to minutes from its March 18 meeting released after the opening.
The Fed then decided to lower its target interest rate 0.75% to 2.25%. The minutes tell us that the majority of officials considered a deep recession a possibility, while a minority of members worried about inflation.
The bearish view adds to news after the start of trading that pending sales of previously owned homes fell a more-than-expected 1.9% in February, according to the National Association of Realtors.
Small caps began the session lower on news from aluminum producer Alcoa Inc. (NYSE:AA) that first-quarter profit declined more than expected, causing investors to fret that corporate earnings will be negatively affected by the economic slowdown.
The index soon recovered and spent the two hours between 11 a.m. ET and 1 p.m. ET hugging the flat line before falling again and closing lower despite a rally in the dying minutes of the session.
Shares of Layne Christensen Co. (Nasdaq:LAYN) bucked the trend, rising more than 20% on news before the opening that fourth-quarter profit jumped 44%.
Here are the day’s biggest percentage gainers and losers, along with top volume leaders, among companies with a market cap between $100 million and $750 million:
• NutriSystem Inc. (Nasdaq:NTRI), up 24% to $18.59 on news it expects first-quarter revenue above analysts’ projections.
• Immersion Corp. (Nasdaq:IMMR), up 23% to $8.25.
• Clean Diesel Technologies, Inc. (Nasdaq:CDTI), up 14% to $14.25 on news it has licensed its technology in China.
• Agria Corp. (NYSE:GRO), down 38% to $5.46 on news its COO has resigned.
• Globalstar Inc. (Nasdaq:GSAT), down 14% to $5.49.
• XTENT Inc. (Nasdaq:XTNT), down 13% to $5.50.
Volume leaders:
• NutriSystem Inc. (Nasdaq:NTRI) 10,578,700 shares traded.
• Agria Corp. (NYSE:GRO) 8,179,100 shares traded.
• Standard Pacific Corp. (NYSE:SPF) 4,322,300 shares traded.
The day saw 12 small-cap stocks set 52-week lows, while six small caps established a 52-week high.
