Small caps slip on profit worries, holiday sales jitters

Small-cap stocks pushed lower, pressured by concerns about corporate profits, worries about late holiday spending results and ongoing jitters about the economy and the credit crisis. Losses were limited by optimism about stimulus plans for 2009 and persistent bargain hunting from market watchers who believe the bottom has already been made. At 9:54 a.m. ET, the Russell 2000 (NYSE:IWM) was down 6.42, or 1.32%, at 479.84.

Some early enthusiasm was tied to news that President-elect Obama will ramp up the job-creation goal of his stimulus package to 3 million new jobs from 2.5 million. The market is already hoping that Obama’s stimulus plans will help spark an economic recovery as 2009 progresses.

Walgreens (NYSE:WAG) posted a smaller-than-expected quarterly profit and announced plans to trim new store opening goals. WAG shares were off 4.1% shortly after the opening. It’s still early to get a good picture for shopping results in the United States over this past weekend, but with winter storms in the Midwest and Northeast, it might be difficult for retailers to come up with great results. Early this morning, the S&P Retail Index was down 0.5%.

Crude oil prices were choppy into the stock market open, but copper prices rose 4% in London trading, bolstered by a dip in the U.S. dollar against the euro and by news of a big jump in China imports during November. The greenback remained down against the euro, which could underpin various commodity markets today.

Citigroup analysts said that they remain underweight on utilities, autos and real estate investment trusts. Carmakers were a source of weakness for overseas markets . . .

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

Already a member? Please log in below