Russell 2000 slips again

The Russell 2000 (NYSE: IWM) lost ground for the second day in a row as financial concerns extinguished an early rally. The small-cap index fell 4.12 points, or 0.59%, to 688.60. The Dow Jones Industrial Average (INDU) surrendered 171.44 points, or 1.38%, to 12,207.17.

On a year-to-date basis, the Russell 2000 has declined 10.02%, while the Dow has let go 7.97% and the S&P 500 has shed 9.38%.

Small-cap stocks began the day in the green but lost steam midway through the session as financial concerns spooked investors.

The bulls were poised to act following news after the close on Thursday that Microsoft Corp. (Nasdaq: MSFT) reported better-than-expected fiscal second-quarter results.

The Redmond, Wash.-based software maker saw its profit jump 79% to $4.71 billion, or $0.50 per share, compared with $2.63 billion, or $0.26 per share, a year earlier. Analysts were calling for earnings of $0.46 per share.

Similarly, Peoria, Ill.-based Caterpillar Inc. (NYSE: CAT) announced before the start of trading that its fourth-quarter earnings rose 11% to $975 million, or $1.50 per share, compared with a net income of $882 million, or $1.32 per share, a year earlier.

The maker of earth-moving equipment attributed the improvement to strong global economic growth, but warned that it expects domestic economic growth to be “anemic,” according to a statement by CEO Jim Owens.

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