Tag - Rbi

The Russell 2000 (IWM) rose for the first time this week despite news that painted a bleak picture of the U.S. economy. The small-cap index added 10.29 points, or 1.49%, to 702.78. The Dow Jones Industrial Average (INDU) added 46.90 points, or 0.38%, to 12,247.00.

On a year-to-date basis, the Russell 2000 has shed 8.26%, while the Dow has let go 7.67% and the S&P 500 has left behind 8.95%.

Small-cap stocks went on a rollercoaster ride that started with a decline out of the gate as investors reacted to news that U.S. retail sales in January generally missed already low expectations.

That’s a worrying sign that consumers have pulled back and the economy is either headed for a recession or already in one.

Grabbing the headlines was Wal-Mart Stores, Inc. (NYSE: WMT), which announced that its January same-store sales increased a paltry 0.5%, below the forecasted 2%. If American consumers really are reining in their spending, the squeeze won’t be felt just by the world’s largest retailer.

“Smaller-cap retailers are definitely more volatile than their larger brethren, many times because they are focused on one particular niche,” said Eric Beder, a retail analyst with investment bank Brean Murray, Carret & Co., in an email.

The Russell 2000 (NYSE: IWM) and the other major U.S. indices are deep in the red amidst recession fears and an interest rate cut.
 
At 10:19 a.m. ET, the small-cap index had fallen 8.88 points, or 1.32%, to 664.30. The Dow Jones Industrial Average (INDU) was down 230.13 points, or 1.90%, to 11,869.17.

Stocks small and large are posting declines due to fears of a U.S. recession and sell-offs on some overseas exchanges.

Increased worries of an economic recession motivated the U.S. Federal Reserve to make an emergency cut in the federal funds rate to 3.50% from 4.25%.

The Fed has not moved to lower its target rate between meetings since September 2001, in the wake of the terrorist attacks. Its next regularly scheduled meeting is on Jan. 29 and 30.

“The Committee took this action in view of a weakening of the economic outlook and increasing downside risks to growth,” the Fed said in a statement. “While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households.”

The Russell 2000 opened with a large drop, losing more than 3% right of the bat, with the Dow posting a slightly smaller loss. But stocks trimmed those numbers and the roles reversed, the Dow now posting a deeper decline.

Sport Supply Group, Inc. (AMEX: RBI) said today that it is unaware of any reason for Friday’s higher than average trading volume and stock price decline.

Shares of the provider of sporting goods catalogs sunk 24% to close at $7.00 Friday.

The company’s CEO, Adam Blumenfeld, stated in a press release, “We don't typically comment on unusual market activity, industry speculation or rumors. However, in light of recent trading activity in our stock, we felt it was important to communicate that we are not aware of any material, undisclosed information or corporate development that would contribute to Friday’s decline or unusually high trading volume.”

Shares of Sport Supply Group (RBI) gained 8.7%, or $0.90, to $11.25 at 10:06 a.m. ET. Shares of Sport Supply Group have been trading in the range of $15.31 to $25.42 for the past 52 weeks.