Russell 2000 drops on rate worries
The Russell 2000 (NYSE: IWM) opened in the red on concerns that the U.S. Federal Reserve may not move to lower interest rates.
At 10:45 a.m. ET, the small-cap index was down 1.76 points, or 0.21%, to 819.96. The Dow Jones Industrial Average (INDU) had lost 44.38 points, or 0.32%, to 13,825.88.
Investors are turning their attention to the U.S. Federal Reserve today, which begins a two-day policy meeting.
On Monday, observers were confident that the Fed will cut its target interest rate up to 0.50%, but today an article in The Wall Street Journal is casting doubt on that expectation, claiming that policy makers will likely either cut the federal funds rate 0.25% or leave it unchanged.
The federal funds rate, the rate at which commercial banks make overnight loans to each other, currently stands at 4.75%, after the Fed voted on Sept. 18 to lower it from 5.25%.
The central bank will announce its decision on Wednesday.
In economic news, U.S. consumer confidence continued to fall in October. The Conference Board reported after the start of trading that its index of consumer confidence fell to 95.6 from 99.5 in September.
“Consumer Confidence posted its third monthly decline and continues to hover at two-year lows,” said Lynn Franco, director of The Conference Board Consumer Research Center, in a statement.
The survey showed that consumers’ assessment of present-day conditions worsened, with the percentage responding that conditions are “good” declining to 23.4 from 25.7 in September. However, those saying that conditions are bad fell to 16.3% from 17.8%.
In corporate news, shares of United States Steel Corp. (NYSE: X) are hurting after the steel producer reported this morning that third-quarter net income missed analysts’ projections by falling 35% due to costs associated with an acquisition.
Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:
Biggest percentage gainers:
• 3SBio Inc. (SSRX), up 11%. A company representative could not be reached for comment.
• China Fire & Security Group, Inc. (CFSG), up 10%. A company representative could not be reached for comment.
• FreightCar America, Inc. (RAIL), up 1% on news that third-quarter profit beat expectations.
Biggest percentage losers:
• Morton’s Restaurant Group, Inc. (MRT), down 1% on news of a wider third-quarter net loss.
• Premier Exhibitions Inc. (PRXI), down 2% on news of a share repurchase program.
• EuroBancshares Inc. (EUBK), down 2% after news on Monday of a third-quarter net loss.
About the Author
Reporter Alex Alexandrov is based in SmallCapInvestor.com's Washington, D.C. bureau.
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