Mild pullback for small caps as crude oil hits record high

Small-cap stocks had a relatively sleepy pullback Monday, as climbing crude oil prices and a soft dollar offset an upside surprise in economic data from the ISM Non-Manufacturing Survey. The Russell 2000 (NYSE:IWM) dipped 1.39, or 0.19%, to 724.35.

The ISM Non-Manufacturing Survey came in at 52%, which was well above the median forecast for 49.5%, but neither investors nor analysts seemed ready to say that an economic growth trend for the services sector was at hand. The report sparked a brief bid in equities when it was released, but it had very little staying power throughout the day and lost the spotlight as crude oil prices began climbing.

Crude oil prices soared to a fresh record high, zooming past $120 dollars a barrel for the first time. Crude prices have jumped about 9% from last week’s low, and remain a concern for the U.S. economy, consumer spending habits and sentiment heading toward the summer driving season.

Even before the crude oil surge, equities were on the defensive this morning following weekend news that Microsoft (Nasdaq:MSFT) had retracted a bid for Yahoo! Inc. (Nasdaq:YHOO), dulling some of the merger and acquisition hype built up by the recent Mars/Wrigley (NYSE:WWY) deal. Investors pounded Yahoo! shares, which tumbled 15% on the news.

In addition to rising energy prices, other commodity markets were on a roll Monday, with the Commodity Research Bureau Index of a broad swath of physical goods climbing 1.4%, with copper prices soaring 3% to a record peak amid supply disruptions out of Chile and a lift from the ISM data. With crude oil prices and other . . .

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