Steep decline for small caps
The Russell 2000 (NYSE: IWM) is posting a large decline on news that the U.S. services sector suffered an unexpectedly sharp drop in January.
At 10:06 a.m. ET, the small-cap index was down 8.34 points, or 1.15%, to 715.12. The Dow Jones Industrial Average (INDU) had let go 197.53 points, or 1.56%, to 12,437.63.
The Institute for Supply Management’s monthly non-manufacturing index fell to a reading of 41.9 in January from its previous level of 54.4, the trade association reported this morning.
That’s a much steeper decline than the one forecasted by economists. New orders, employment and inventories all saw a decline.
In corporate news, the bears are reacting to Banc of America Securities’ downgrade of search engine Yahoo! Inc. (Nasdaq: YHOO) to “neutral” from “buy,” due to concerns about its ability to compete with Google Inc. (Nasdaq: GOOG) in online advertising.
