Small caps plunge on Bernanke
The Russell 2000 (NYSE: IWM) posted the steepest decline as U.S. indices fell on news that U.S. Federal Reserve chairman Ben Bernanke called economic growth “sluggish.” The small-cap index lost 16.61 points, or 2.30%, to 705.32. The Dow Jones Industrial Average (INDU) declined 175.26 points, or 1.40%, to 12,376.98.
On a year-to-date basis, the Russell 2000 has let go 7.93%, while the Dow is missing 6.69% and the S&P 500 has fallen 8.14%.
“My baseline outlook involves a period of sluggish growth, followed by a somewhat stronger pace of growth starting later this year,” Bernanke told the Senate Banking Committee today. “The outlook for the economy has worsened in recent months, and the downside risks to growth have increased.”
The bears took complete control of trading as soon as the Fed chief began his congressional testimony at 10 a.m. ET and small-cap stocks began a virtually uninterrupted slide down.
Bernanke hinted that rate cuts are possible in the future and pointed out he is not predicting a recession, but investors didn’t take notice.
In economic news, the U.S. Commerce Department reported that the country’s trade deficit fell by a greater-than-expected 6.9% to $58.76 billion in December from $63.12 billion in November.
However, the U.S. Labor Department reported that for the week ended Feb. 9, the four-week moving average for new jobless claims increased 12,000 to its highest level since October 2005.
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:
• FARO Technologies, Inc. (FARO), up 17% to $29.26 on news that fourth-quarter net income beat analysts’ expectations.
• Amtech Systems, Inc. (ASYS), up 13% to $12.61 on news of a stellar fiscal 2008 first quarter.
• Switch & Data Facilities Company, Inc. (SDXC), up 10% to $11.00.
• Astronics Corp. (ATRO), down 32% to $22.23 on news of a 2008 revenue forecast below expectations.
• Allscripts Healthcare Solutions, Inc. (MDRX), down 27% to $11.27 despite news that fourth-quarter adjusted earnings met expectations.
• Build-A-Bear Workshop, Inc. (BBW), down 20% to $10.34 on news of a decline in fourth-quarter profit.
• Allscripts Healthcare Solutions, Inc. (MDRX) 14,779,600 shares traded.
• Dendreon Corp. (DNDN) 12,402,300 shares traded.
• TASER International, Inc. (TASR) 6,637,800 shares traded.
The day saw 44 small-cap stocks set 52-week lows, while 10 small caps established a 52-week high.
