Small caps feel housing heat

Small caps were unable to hold their own today in the wake of bad housing data, the unveiling of a $75 billion mortgage relief plan and Fed Chairman Ben Bernanke’s sharp growth-view cut for 2009.

At closing, the Russell 2000 (NYSE:IWM) was down 5.72, or 1.3%, to 423.18. The Dow and S&P 500 essentially closed flat. For the year, the Russell is down nearly 15.3%, with the Dow down 13.9% and the S&P 500 down 12.7%.

Before the opening bell this morning, the Commerce Department reported that construction of new homes and apartments fell to a record low annual rate of 466,000 in January — a 16.8% drop compared with analyst predictions of a mere 5% drop. Analysts were forecasting an annual rate of 530,000 units, down from 550,000 units in December...

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