Russell 2000 slightly up

Alex Alexandrov | Nov 02, 2007 1:27pm EDT | Comment

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The Russell 2000 (NYSE: IWM) is moving erratically this afternoon as trading is choppy halfway through the session. At 1:23 p.m. ET, the small-cap index had added 2.45 points, or 0.31%, to 797.63. The Dow Jones Industrial Average (INDU) was down 10 points, or 0.07%, to 13,557.87.

Small-cap stocks went on a rollercoaster ride during the first half of today’s session as investors reacted to both bullish and bearish news.

The bulls appeared first, encouraged by news before the opening that non-farm payrolls increased 166,000 in October, according to the U.S. Labor Department. That’s more than double the projected rise of 80,000, a sign that the labor market remains tight and that the U.S. economy will most likely avoid recession. Payrolls increased a downwardly adjusted increase of 96,000 in September.

The unemployment rate stayed at 4.7%.

But the bulls relished for just a few minutes before yielding the floor to the bears.

Investors turned their attention to an article in The Wall Street Journal that claims that Merrill Lynch & Co. Inc. (NYSE: MER) has made deals with hedge funds to postpone when it records losses due to bets made on securities backed by subprime mortgages. The New York-based financial services giant may have to write down $10 billion in losses.

News of the article, which was published before the start of trading, spooked investors and spread fears concerning the extent of damage from this summer’s credit squeeze. Financial stocks immediately took a hit and dragged down the rest.

Small-cap stocks fell steeply, then climbed back toward the flat line, then fell again. The rollercoaster made its latest turn at about 12 p.m. ET, when the Russell 2000 again started rising. The index moved into the green shortly before 1 p.m. ET.

With the financial sector at focus, the U.S. dollar slid to another low against the euro. The greenback can now be exchanged for 0.6894 of the currency adopted by 13 countries in the 27-member European Union. The dollar began the day above 0.692.

Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• RadiSys Corp. (RSYS), up 24% on news that third-quarter profit beat expectations.
• GB&T Bancshares Inc. (GBTB), up 22% on news it is being acquired by SunTrust Banks, Inc. (STI).
• PDF Solutions Inc. (PDFS), up 19% following news after the close on Wednesday of an increase in third-quarter profit.

Biggest percentage losers:

• Glu Mobile Inc. (GLUU), down 33% on news of a disappointing third-quarter.
• On Assignment Inc. (ASGN) down 25% on news of a drop in third-quarter profit.
• OPNET Technologies Inc. (OPNT), down 24% on news of a decline in fiscal second-quarter earnings.