Russell 2000 outpaces large-cap indices

Small-cap stocks wasted no time validating Friday’s big breakout move, scorching the bears with back-to-back big gains as the inflation picture brightened and the U.S. dollar remained in rally mode. The Russell 2000 (NYSE:IWM) closed up 16.76, or 2.28% at 751.06, notching consecutive daily gains of more than 2% for the first time all year.

Small caps were noticeably strong relative to other large-cap index products, with the percentage gain in the Russell more than double what was generated in the Nasdaq 100, S&P 500 or Dow. “I think small caps are strong relative to other products amid asset shifts. The drop in commodities and investors warming up to equities is helping the small-cap sector,” Nick Kalivas, vice president, financial research with MF Global, told SmallCapInvestor.com in an email interview.

“The action in the small cap sector is a positive for the entire market. I also think that overseas growth is looking relatively weak and this may be causing investors to feel more comfortable with small caps since large corporations have more international exposure,” Kalivas said...

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