Small caps move higher

The Russell 2000 (NYSE: IWM) is posting a gain as stocks are trading with no clear direction.

At 10:24 a.m. ET, the small-cap index had added 0.63 points, or 0.09%, to 703.41. The Dow Jones Industrial Average (INDU) was down 6.99 points, or 0.06%, to 12,240.01.

Small-cap stocks opened lowered but quickly bounced higher, leaving their bigger counterparts behind.

With little economic news scheduled for today, investors are looking for direction. The mood in pre-market trading was slightly bearish following news that an official from the U.S. Federal Reserve said that the economy is headed for a slowdown.

“I consider it most probable that the U.S. economy will experience slow growth, and not outright recession, in coming quarters,” said Janet Yellen, president of the Federal Reserve Bank of San Francisco, in a speech in Honolulu.

Elsewhere, the U.S. Congress approved a $152 billion economic stimulus package that consists of tax rebates and business incentives that will hopefully prevent a recession.

Helping the small-cap index rise is wireless communications company TerreStar Corp. (Nasdaq: TSTR), which saw its shares soar more than 30% on news that it will get about $300 million from investors.

Also rising is San Jose, Calif.-based VNUS Medical Technologies, Inc. (Nasdaq: VNUS), which swung to a fourth-quarter profit.

PDF Solutions, Inc. (Nasdaq: PDFS) did even better, reporting an increase in fourth-quarter profit. But shares of the provider of technologies and services to semiconductor companies are down on news of disappointing first-quarter guidance.

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