Russell 2000 slightly up

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.

For access to the full article, you must be a registered member - it's FREE.

Already a member? Please log in below