Small-company stocks gain
NEW YORK — Small-company stocks were a bright spot in a slow and choppy start to the week for Wall Street.
The Russell 2000, an index of small-company stocks, climbed above 1,000 points for the first time and ended higher Monday, even as the Dow Jones industrial average, the Standard & Poor's 500 index and the Nasdaq composite index all edged lower.
Small stocks are doing well because they are more focused on the United States, which is recovering, and are less exposed to recession-plagued Europe than the large international companies that make up the Dow and the S&P 500 index.
The gains for the smaller companies are encouraging for the broader stock market because they show that investors are becoming more comfortable about the economy and investing in riskier assets, said Rob Lutts, chief investment officer at Cabot Money Management.
Small-company stocks are considered riskier than the stocks of well-established, large companies like IBM or Coca-Cola. That's because small companies are often relatively young and tend to have less diversified businesses than larger ones, making them more susceptible to swings in demand from their customers. There also are fewer buyers and sellers for them, which can make the stocks harder to off-load if prices start to fall.
“Having smaller stocks hit new highs means that the rally is broad,” Lutts said. “It gives us a little more confidence that it's a good, sustainable rally that can hold together for a while.”
The Russell 2000 ended the day 1.70 points, or 0.2 percent, higher at 997.98. The index climbed as high as 1001.50 at midday. The index is 17.5 percent higher for the year, a better performance than better-known market barometers like the Dow and S&P.
The Dow closed down 19.12 points, or 0.1 percent, at 15,335.28, paring its gain for the year to 17 percent. The S&P 500 index fell 1.18 points, or 0.1 percent, to 1,666.29. Its advance for the year now stands at 16.8 percent.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Federal agency checking whether Highmark has enough doctors in Medicare plan
- Lower gasoline prices fail to spur consumer spending
- Retailers that won’t open on Thanksgiving hope move pays off
- Google applies tech to medical device
- Small businesses’ dilemma: Keep costly health care coverage or lose talented workers
- Oil prices continue descent, dragging market indexes lower
- Thanksgiving deals called the best
- Westinghouse to construct colossal nuke plant in Turkey
- Household debt on the rise after 5-year decline
- Axed contracts push doctors from network, UPMC says
- Housing prices nudge upward as more homes on market