Small caps slipping
The Russell 2000 (NYSE: IWM) shed its earlier gains despite news of possible future rate cuts and housing relief. At 1:55 p.m. ET, the small-cap index was down 1.53 points, or 0.21%, to 715.79. The Dow Jones Industrial Average (INDU) had advanced 14.66 points, or 0.12%, to 12,699.58.
Stocks small and large were posting modest gains on news that government regulators from the Office of Federal Housing Enterprise Oversight will remove the investment caps of mortgage lenders Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE).
The move will allow the two companies to invest billions in the housing market by purchasing mortgage-related securities.
The Russell 2000 climbed into the green at about 10:30 a.m. ET, and stayed in positive territory until about 1.30 p.m. ET.
Also contributing to the bullish mood was speculation of more interest rate cuts when the U.S. Federal Reserve meets on March 18. Fed chairman Ben Bernanke spoke on Capitol Hill earlier today and told lawmakers that the central bank “will act in a timely manner” to keep the economy growing.
The federal funds rate, the rate at which commercial banks make overnight loans to each other, currently stands at 3%, down from 5.25% in mid-September.
Among the small-cap gainers, shares of basic materials companies leading the way.
South African gold mining company DRDGOLD Ltd. (Nasdaq: DROOY) has seen its stock climb 8%, Orezone Resources Inc. (AMEX: OZN) is also posting a healthy rise, while Tanzanian Royalty Exploration Corp. (NYSE: TRE) is just above the flat line.
Elsewhere, shares of fish meal and fish oil products distributor Omega Protein Corp. (NYSE: OME) are higher on news an analyst raised his price target for the stock to $20 from $13.
Meanwhile, shares of CV Therapeutics, Inc. (Nasdaq: CVTX) are looking pale on news that the Palo Alto, Calif.-based maker of drugs for the treatment of cardiovascular diseases reported fourth-quarter results below analysts’ forecasts.
