Small caps in the red

After briefly surging in morning trading, small-cap stocks sagged in afternoon trading. A drop in crude oil prices, positive factory orders data and comments by Federal Reserve Chairman Ben Bernanke encouraged buyers, but bearish comments by hedge fund investor George Soros gave investors pause. At 2:23 p.m. ET, the Russell 2000 (NYSE:IWM) was down 7.10, or 0.96%, at 733.92.

Bernanke indicated that the Fed will not increase interest rates again until the housing market stabilizes. The chairman also said financial markets have improved but are still strained.

"We are attentive to the implications of changes in the value of the dollar for inflation and inflation expectations and will continue to formulate policy to guard against risks to both parts of our dual mandate," Bernanke said.

Bernanke’s comments sparked a reversal in the American dollar’s value against the euro. In recent trading, the U.S. dollar rose against the euro to $1.5454 from Monday’s close of $1.5539. The greenback was also up against the yen. The U.S. Dollar Index, which measures the dollar against six foreign currencies, was up 0.6% in Tuesday afternoon trading.

The factory orders report came out at 10:00 a.m. ET, with the headline figure at plus 1.1%, beating the median forecast for a dip of 0.1%.

Crude oil futures were down to $125.60 a barrel.

Broad market sectors experiencing a sell-off include motion picture services, aerospace and defense capital goods, metal mining materials, home improvement service retailers and railroad transportation. On the upside, computer storage device, airlines, footwear, and audio and video equipment companies were attracting . . .

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

Already a member? Please log in below