Small caps tumbling
The Russell 2000 (NYSE:IWM) is falling despite news that Citigroup Inc. (NYSE:C) may be near a deal to improve its balance sheet.
At 10:09 a.m. ET, the small-cap index was down 2.95 points, or 0.41%, to 708.97. The Dow Jones Industrial Average had lost 14.49 points, or 0.12%, to 12,561.95.
Citigroup is near a deal to sell approximately $12 billion of leveraged loans and bonds to a group of private equity firms, according to news reports before the start of trading. A potential sale will improve its balance sheet.
The New York-based bank had issued debt to help finance leveraged buyouts and found itself in a difficult situation as investors became reluctant to buy the debt.
Futures were pointing up and small-cap stocks opened in positive territory but fell below the flat line shortly before 10 a.m. ET.
Among the biggest losers is small-cap Nektar Therapeutics (NASDAQ:NKTR). The San Carlos, Calif.-based company reported before the opening that clinical trials of its inhaled insulin product showed an increase in new cases of lung cancer.
Similarly, shares of The Pantry Inc. (Nasdaq:PTRY), which operates convenience stores, are down on news before the start of trading that the Sanford, N.C.-based company expects to report a loss for the second fiscal quarter.
