Small caps rise as oil retreats

Small-cap stocks are rising in afternoon trading, as crude oil dropped to about $136 a barrel and the U.S. dollar gained on both the euro and the yen. Federal Reserve Chairman Ben Bernanke further fueled bullish sentiments by suggesting the central bank could extend emergency lending to financial firms in a morning speech.

At 2:38 p.m. ET, the Russell 2000 (NYSE:IWM) was up 9.38, or 1.42%, at 667.64, while the Dow was up 52.67, or 0.47%, at 11,284.63.

“Today, Federal Reserve Chairman Ben Bernanke said that the U.S. central bank may keep an emergency lending facility for big Wall Street firms open past the critical year end turn as the Fed hopes to restore financial market stability,” Andy Busch, global foreign exchange strategist for BMO Capital Markets, wrote in an email. “Given the panic Monday in Fannie Mae and Freddie Mac, I think this will help cool some of the hype/panic of another looming financial market meltdown.”

Broad market sectors on the rise this afternoon include airlines, restaurant services, groceries, railroads, major drug companies, trucking transportation and life insurance. Sectors experiencing a sell-off include coal, metal mining, oil and gas operations, iron and steel, construction and agricultural machinery, hotels and motels, gold and silver and chemical manufacturing.

Small-cap companies making news this afternoon include natural gas and oil company Royale Energy Inc. (Nasdaq:ROYL), which is down 14% in afternoon trading as a result of crude oil prices dropping from last week's record-highs. InterDigital Inc. (Nasdaq:IDCC) is falling more than 23% this afternoon after the company announced the start of a hearing in the U.S. International Trade Commission against Samsung Electronics Co. Ltd. InterDigital, a King of Prussia, Pa.-based wireless technology designer and distributor, alleges that Samsung engaged in unfair trade . . .

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