|
US Small-Cap Stocks End Mixed; Health
Care Falls, Energy Gains
FEBRUARY 25, 2010
By David Benoit
NEW YORK (Dow Jones)--U.S. small-capitalization stocks
ended mixed Thursday as a surprising increase in weekly
jobless claims sent the market reeling early before a
late afternoon rise reversed much of the drop.
The small-cap indices initially fell sharply Thursday as
the market reacted harshly to U.S. Labor Department data
showing a rise in jobless claims; economists had
projected a decline. But the markets recovered off the
morning lows, and the Russell 2000 index of small-cap
stocks managed to eke out a slight gain in the very
closing minutes of trading. The S&P SmallCap 600 couldn't
match the late-day recovery, and remained slightly
lower, although it is up as a whole on the week.
With one trading session left, the small-cap indices
have performed much better than the large-capitalization
stocks for the month of February. The perception is that
small caps are riskier because they can have a more
narrow focus and are often more illiquid.
Keith Springer, president of Capital Financial
Advisory Services in Sacramento, Calif., said the
small-caps have been outperforming the
larger-capitalization stocks because in a slow economy
they actually stand a better chance of improving
results.
"A little bit to the bottom line can be a big deal to
them," Springer said.
Springer said the concerns raised by economic data such
as the jobless report could actually help investors,
because if the market is going to rise it will need the
current policies of central bankers to remain. As U.S.
Federal Reserve Chairman Ben Bernanke assured Wednesday,
a weak economy will keep those policies in place for
some time.
"The two things the market needs are liquidity and low
interest rates," Springer said. "With a slow economy we
are going to continue to have a free lunch, Bernanke is
still going to keep giving."
Thursday, the Russell 2000 index inched up 0.03 points
to 630.46 after it had, at one point, been down as much
as 1.56%. For the month, the index has gained 4.72%, and
it's risen in 11 of the past 12 trading sessions.
The S&P SmallCap 600 index slipped 0.38, or 0.11%, to
close at 335.65. It had lost as much as 1.61% earlier in
the day but has risen 4.52% this month.
Among the weakest sectors Thursday was health care, as
President Barack Obama hosted a summit on health-care
reform. Kendle International reported fourth-quarter
revenue below analysts' expectations; the clinical
research company's shares fell 2.56, or 12%, to
18.42. Cambrex, which provides products and services to
generic drug makers, fell 35 cents, or 8.7%, to 3.68 on
the New York Stock Exchange. AMN Healthcare Services
(NYSE), a health-care staffing company, lost 38 cents,
or 4%, to 9.24.
Offsetting some of that weakness was a gain by the
energy sector that came despite a drop in oil prices.
Matrix Service, an energy-industry engineering and
construction company, rose 56 cents, or 5.4%, to 10.90,
while PetroQuest Energy (NYSE), an independent explorer
and producer of oil and natural gas, gained 19 cents, or
3.8%, to 5.14.
Keith Springer is President of Capital Financial
Advisory Services, a registered investment advisor,
providing Wealth Management and Mortgage Consulting
Services. For more information on how to build and
maintain a solid retirement plan, please contact Keith
Springer at 916-925-8900 or
Keith@KeithSpringer.com
|
