Russell 2000 futures decline

Alex Alexandrov | Feb 05, 2008 8:57am EST | Comment

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The Russell 2000 (NYSE: IWM) futures are down and the small-cap index will open with a drop on news of a tech sector downgrade.

Stocks small and large are pointing to a lower opening on news that Banc of America Securities has downgraded Yahoo! Inc. (Nasdaq: YHOO) to “neutral” from “buy,” saying that the Sunnyvale, Calif.-based search engine is struggling to revive its online advertising business and compete with rival Google Inc. (Nasdaq: GOOG).

Additionally, Banc of America Securities thinks that the proposed $45 billion dollar buyout acquisition of Yahoo! by Microsoft Corp. (Nasdaq: MSFT) could face regulatory hurdles, particularly in the 27-member European Union.

Investors will be looking ahead to the Institute for Supply Management’s report on the service sector in January, due at 10 a.m. ET. Economists are expecting to see a small decrease.

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

Biggest percentage gainers:

• Euroseas Ltd. (ESEA), up 18%.
• Yucheng Technologies Ltd. (YTEC), up 10% on news of a rise in fourth-quarter profit.
• Travelzoo Inc. (TZOO), up 5% on news that it has partnered with magazine Vanity Fair for a promotional campaign.

Biggest percentage losers:

• China Precision Steel, Inc. (CPSL), down 5%.
• AuthenTec, Inc. (AUTH), down 7% despite news of a steep rise in fourth-quarter revenue.
• China Finance Online Co. Ltd. (JRJC), down 3%.