Small caps bounce as commodities fall

Small-cap stocks pushed higher in early trading, bolstered by sinking crude oil and other commodities, which helped ease inflation jitters. At 10:02 a.m. ET, the Russell 2000 (NYSE:IWM) was up 10.39, or 1.48% at 714.53, gaining back a sizable chunk of Monday’s losses, but holding within the recent trading ranges.

The ISM non-manufacturing survey came in at 49.5%, which was above the forecast of 48.5%, but still slightly below the 50.0% level, which denotes expansion vs. contraction in the services sector. The market remained on firm footing through the ISM data.

Now that ISM is out of the way, many investors will wait for this afternoon’s FOMC announcement. Although the Fed is not expected to shift short-term rates on Fed funds, the language in the statement could spark some movement in equities, interest rates and foreign exchange. There is some thought that the recent decline in crude oil prices will provide the Fed a little breathing room on the inflation fighting front, and lessen the need to act prematurely to stave off rising prices via tighter monetary policy...

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