Russell recoups big chunk of 2% morning plunge

Small-cap stocks recaptured the bulk of a steep morning slide as commodity stocks and tech stocks went into rally mode and financial shares trimmed losses amid hope that the ongoing calamity at Lehman Brothers Holdings Inc. (NYSE:LEH) would not widen into other an all-out financial meltdown. At 12:47 p.m. ET, the Russell 2000 (NYSE:IWM) was down 4.30, or 0.60% at 712.86, well off the morning low of 700.49.

Once again today we see a pattern of commodity stocks pulling up small-caps, even though physical commodity markets themselves are under pressure in line with a strong U.S. dollar and sinking crude oil prices. In addition, the decline in energy prices has been a supportive element for many sectors, particularly the airline industry. Crude oil prices tumbled some $1.50 dollars a barrel earlier, and the Commodity Research Bureau Index of 19 physical markets slipped to a seven-month low.

Looking at broad market sectors into the midday time frame, automobile manufacturers, oil refiners, railroads, fertilizers, homebuilders, steel, coal and tire stocks were all seeing significant gains, helping to stabilize equities after a bruising morning swoon. Tech stocks have been the best performers so far today, with the tech-laden Nasdaq 100 holding in positive territory even after the Dow and S&P 500 slipped back into the red. Small-caps tried to push into the green, but the move stalled as financials are still a sore spot for the market.

Looking at losing sectors right now, insurance firms are getting hammered. American International Group Inc. (NYSE:AIG) was still down some 12%. Also, investment banks and brokerage firms were getting sullied, with the big story on that . . .

For access to the full article, you must be a registered member - it's FREE.

Already a member? Please log in below