Weak economy bad for small caps
The Russell 2000 (NYSE: IWM) posted a decline following news of more bleak economic reports. The small-cap index fell 1.96 points, or 0.29%, to 684.22, its fourth consecutive decrease. The Dow Jones Industrial Average (INDU) lost 7.49 points, or 0.06%, to 12,258.90.
On a year-to-date basis, the Russell 2000 has lost 10.68%, while the Dow is down 7.58% and the S&P 500 has shed 9.33%.
The U.S. economy again took center stage today as twin government reports again raised fears of a recession. Stocks fell on Friday after an inflation gauge came in higher than expected and a measure of regional business conditions disappointed.
Today’s bad news came in the form of a report from the U.S. Census Bureau after the opening that construction spending fell a more-than-expected 1.7% in January to an annual rate of $1.121 trillion. On a year-over-year basis, construction spending is down 3.3%.
Meanwhile, the Institute for Supply Management said after the start of trading that its manufacturing index declined to 48.3 in February from 50.7 in January. Economists were expecting to see a steeper decline. Readings below 50 indicate a contraction.
New orders, inventories, production and employment all posted declines, while the backlog of orders increased.
The Russell 2000 dropped out of the get then rose to its session high of near 689 points at about 10:30 a.m. ET before falling again. Small-cap stocks bottomed out at 3 p.m. ET at a level of 675 but rallied in the last hour of trading.
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:
Biggest percentage gainers:
• Array BioPharma Inc. (ARRY), up 17% to $6.56 on news of a successful drug trial.
• Eurand N.V. (EURX), up 14% to $15.14.
• Regeneration Technologies, Inc. (RTIX), up 13% to $9.76.
Biggest percentage losers:
• Genesco Inc. (GCO), down 17% to $24.77 on news that Finish Line Inc. (Nasdaq: FINL) will not proceed with its $1.5 billion buyout.
• ANADIGICS, Inc. (ANAD), down 16% to $5.94.
• Irwin Financial Corp. (IFC), down 14% to $6.49 on news it has decided to suspend its quarterly dividends.
Volume leaders:
• USEC Inc. (USU) 8,441,300 shares traded.
• R.H. Donnelley Corp. (RHD) 8,419,500 shares traded.
• ANADIGICS, Inc. (ANAD) 7,455,300 shares traded.
