Soft earnings, profit-taking weigh on small caps

Small-cap stocks pushed lower, pressured by news of soft earnings and by profit-taking from traders who caught Tuesday’s big rally. At 9:54 a.m. ET, the Russell 2000 (NYSE:IWM) was down 5.15, or 0.71% at 715.89.

Tech stocks were underpinned relative to other index products by surprisingly stout earnings from Cisco Systems Inc. (Nasdaq:CSCO), which was up 5% shortly after the open. Within the tech arena, Microsoft Corp. (Nasdaq:MSFT) was the beneficiary of positive analyst comments overnight and was up 1.5%.

However, the good news on big-cap techs was countered by big losses from a broad spectrum of companies. For example, Whole Foods Market Inc. (Nasdaq:WFMI), missed the earnings projection and tumbled 18% on the open. Also, priceline.com (Nasdaq:PCLN) was down 13% as the company had a cautious forward-looking statement. Freddie Mac (NYSE:FRE) dropped 13% on sloppy quarterly earnings and news that the firm will reduce its dividend.

Crude oil prices were on mildly firm footing this morning awaiting the weekly inventory report, which comes out near 10:35 a.m. ET. Energy prices have tanked in recent days, sinking over 19% from the summer peak to the recent low. The market is a little oversold on short-term momentum readings and vulnerable to a bounce. In addition, an explosion in a pipeline in Turkey and concerns about potential supply disruptions out of Africa were supportive elements in play. As for the inventory report, traders are looking for a build in crude oil stocks of about 300,000 barrels...

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