Russell 2000 falls hard
The Russell 2000 (NYSE: IWM) posted a big loss as news of liquidity problems at Bear Stearns spread credit fears. The small-cap index fell 16.81 points, or 2.47%, to 662.90. The Dow Jones Industrial Average (INDU) declined 194.65 points, or 1.60%, to 11,951.09.
On a year-to-date basis, the Russell 2000 has lost13.46%, while the Dow is down 9.90% and the S&P 500 has retreated 12.27%.
Stocks small and large tumbled today on news that Bear Stearns’ (NYSE: BSC) cash position has deteriorated significantly over the past 24 hours. The investment bank, which has been highly exposed to the subprime mortgage sector, turned to J.P. Morgan Chase & Co. (NYSE: JPM) and the New York Federal Reserve for short-term financing to alleviate its liquidity problems.
There’s speculation that Bear Stearns will soon be purchased by one of its larger rivals. News of the company’s problems spread fears of a severe credit squeeze, leading to a sharp sell-off.
But the Russell 2000 and the other major U.S. indices initially began the session in the green on news that consumer prices surprisingly didn’t change in February, according to the U.S. Labor Department. Economists were expecting to see an increase of 0.2%.
That initial bullish sentiment lasted about 15 minutes as investors digested the news of Bear Stearns’ problems.
Not surprisingly, the financial services sector was the biggest loser today. Shares of small-cap investment bank Evercore Partners Inc. (NYSE: EVR) slipped into the red, as did shares of Piper Jaffray Companies (NYSE: PJC).
San Francisco, Calif.-based Thomas Weisel Partners Group, Inc. (Nasdaq: TWPG) also saw its stock price decline.
Here are the day’s biggest percentage gainers and losers, along with top volume leaders, among companies with a market cap between $100 million and $750 million:
• Optium Corp. (OPTM), up 21% to $6.83.
• DRAXIS Health Inc. (DRAX), up 18% to $5.02.
• AbitibiBowater Inc. (ABH), up 13% to $7.44.
• Ultrapetrol Ltd. (ULTR), down 29% to $8.48 despite news that it swung to a fourth-quarter profit.
• Advance America, Cash Advance Centers, Inc. (AEA), down 16% to $5.98 on news of an analyst downgrade.
• Cenveo Inc. (CVO), down 16% to $11.53 on news of a decline in fourth-quarter net income.
• Hovnanian Enterprises, Inc. (HOV) 5,117,800 shares traded.
• Exelixis, Inc. (EXEL) 5,059,500 shares traded.
• EMCORE Corp. (EMKR) 4,701,600 shares traded.
About the Author
Reporter Alex Alexandrov is based in SmallCapInvestor.com's Washington, D.C. bureau.
Read More
(click a star)
Enter comment: