Small caps trim losses; tech stocks rising

Small-cap stocks remained lower into mid-session trading, but well off the morning lows as gains in the technology arena spilled over into the broad market. Concerns about the economy, a moribund housing market and expiration jitters kept a lid on some buying interest, but the market was trying to spark a rally heading toward the afternoon. At 12:30 p.m. ET, the Russell 2000 (NYSE:IWM) was down 4.02, or 0.75%, at 532.56. The tech-laden Nasdaq 100 was up 0.98%.

Tech shares received a boost from solid profit reports by bellwether International Business Machines (NYSE:IBM), Advanced Micro Devices Inc. (NYSE:AMD) and Google Inc. (Nasdaq:GOOG). Outside of the gold market, commodity stocks were doing well today, with coal, steel, gas utilities, oil exploration, gas storage and agriculture products all pacing upside sector activity. On the downside, anything tied to housing was struggling, including home furnishing stocks and homebuilder shares. Bank stocks and financial shares were also lagging the general market.

The slip in housing-related industries today is no surprise in the wake of a dreadful housing starts report this morning. Housing starts tumbled to an annual rate of 817,000 units, which is the slowest pace in 17 years. What’s more, the rate of starts for single-family homes was at the worst pace in 26 years. Many market watchers say that the current financial crisis started with the bubble being burst on the housing market, and today’s data suggest that the housing market still hasn’t turned the corner.

With everyone spooked by talk of a deep U.S. recession amid a global slowdown, it still takes a leap of faith to say that current stock market prices reflect a solid investment. Arguably the most prominent investor in America said he is making that leap, as Warren Buffett penned an article in the New York Times saying that he was moving money out of Treasury markets and into stocks of U.S. corporations. Buffett, the richest man in America, has quite a cult following and no doubt inspired legions of traders to take a stab at the market today — or at least soon, even if . . .

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