Steep decline for Russell 2000
The Russell 2000 (NYSE: IWM) and the Dow are deep in negative territory on news of liquidity problems at Bear Stearns.
At 12:23 p.m. ET, the small-cap index had shed 14.42 points, or 2.12%, to 665.29. The Dow Jones Industrial Average (INDU) was down 177.96 points, or 1.47%, to 11,967.78.
The bears are running the show on news shortly after the opening that brokerage house Bear Stearns (NYSE: BSC) has seen its cash position deteriorate significantly over the past 24 hours, necessitating emergency short-term financing from J.P. Morgan Chase & Co. (NYSE: JPM) and the New York Federal Reserve.
Bear Sterns has been among the financial companies most severely affected by the meltdown in the subprime mortgage sector.
In economic news, the University of Michigan reported after the start of trading that its preliminary index of consumer confidence fell to 70.5 in early March from 70.8 in February. Economists were expecting to see a steeper decline.
With stocks falling, shares of airline companies are leading the descent.
Alaska Air Group Inc. (NYSE: ALK) is one small-cap airline company currently trading in the red. The Seattle-based firm announced after the close on Thursday that it is making upgrades to its flight schedule at San Francisco International Airport and reducing ticket prices.
Shares of Republic Airways Holdings Inc. (Nasdaq: RJET) are flying lower.
Meanwhile, Furmanite Corp. (NYSE: FRM) announced before the start of trading that it swung to a fourth-quarter profit but missed analysts’ projections. The stock is down more than 10%.
