Small gain for Russell 2000

The Russell 2000 (NYSE: IWM) posted a rise on a quiet day that saw investors go bargain hunting. The small-cap index advanced 0.85 points, or 0.12%, to 699.75. The Dow Jones Industrial Average (INDU) climbed 57.88 points, or 0.48%, to 12,240.01.

On a year-to-date basis, the Russell 2000 has let go 8.65%, while the Dow has retreated 7.73% and the S&P 500 has declined 8.80%.

Trading began on a bearish note but the bulls returned during the second half of the session as investors took a second look at stocks that had declined for four of the past five days.

The futures were pointing up and the Russell 2000 opened in the green but stayed there only minutes, weighed down by news of more credit problems stemming from the slump in the U.S. housing sector.

Insurer American International Group Inc. (NYSE: AIG) announced that it may have to write off billions in mortgage debt and would need to change the way it values its credit default swaps involving collateralized debt obligations.
That news hurt financials, with shares of insurance companies being among the biggest losers today.

The small-cap index dropped to its lowest levels during today’s session at about 10:20 a.m. ET, but began a choppy ascent into positive territory at about 1 p.m. ET.

With little on the economic front, news that Sunnyvale, Calif.-based Yahoo! Inc. (Nasdaq: YHOO) rejected a $42 billion takeover bid from Microsoft Corp. (Nasdaq: MSFT) grabbed the headlines.

The Redmond, Wash.-based software giant is expected to make an improved offer.

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