Small caps move higher

The Russell 2000 (NYSE:IWM) is moving higher after a volatile start following news of a larger-than-expected rise in personal income.

At 10:09 a.m. ET, the small-cap index was up 2.36 points, or 0.34%, to 694.75. The Dow Jones Industrial Average was up 71.88 points, or 0.58%, to 12,374.34.

The futures were pointing up on news before the start of trading that personal income rose a more-than-expected 0.5% in February, according to the U.S. Commerce Department. Economists were expecting an improvement of 0.3%.

The same report also showed that personal spending increased 0.1%, in line with projections but the worst performance in more than a year. A key measure of core inflation climbed just 0.1%, putting 12-month inflation within the U.S. Federal Reserve’s target range.

The bullish pre-market sentiment was in part due to news that Citigroup Inc. (NYSE:C) recommended buying shares of financial services company Lehman Brothers Holdings Inc. (NYSE:LEH).

Small-cap stocks opened in the green, quickly surrendered those gains, then sharply rose.

Among the losers is small-cap Oplink Communications, Inc. (Nasdaq:OPLK). The Fremont, Calif.-based provider of optical manufacturing solutions . . .

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