NEW YORK, May 31 (Reuters) – Mid- and small cap stocks led
the overall equity market lower on Thursday, although the
Russell 2000 cut losses intraday as the index continued to
struggle around its 200-day moving average, a level closely
watched by market analysts.
Wall Street fell for its second straight day and the Russell
faced its worst month since September after a slew of data
pointed to a slowdown in the economy. But the market sharply cut
losses after reports the IMF was discussing a loan to held
struggling Spanish banks.
Small cap stocks have been among the biggest losers in the
second-quarter selloff in equity markets. The Russell 2000 is
down 6.4 percent this month, its biggest monthly drop since
September. The S&P; 500 is off 4 percent so far this month.
“We view the Russell as a better proxy of conditions in the
U.S. economy than the S&P; 500,” said Clark Yingst chief market
analyst at Joseph Gunnar.
The Russell 2000 is showing that “the U.S. economy is
slowing and slowing significantly. It’s only the Russell and the
NYSE composite that have re-engaged at this point through
yesterday their benchmark 200-day moving averages.”
The Russell 2000 fell 0.4 percent to 759.19. The S&P;
MidCap 400 index fell 0.5 percent while the S&P; SmallCap
600 index dropped 0.4 percent. In comparison, the
benchmark S&P; 500 fell 0.2 percent.
Graco Inc will be forced to sell off part of the
finishing business it bought from Illinois Tool Works,
according to a settlement announced by the Federal Trade
Commission on Thursday. Graco’s shares fell 4.9 percent to
$48.58.
On the up side, Ciena Corp shares rose 11.9 pct to
$13.29. The company posted a surprise second-quarter adjusted
profit as rapid build outs of 4G networks by telecom carriers
boosted demand for the company’s network equipment, sending its
shares up 7 percent before the bell.
Zynga Inc rose 4.1 percent to $6.11. Robert W Baird
raised the social gaming company to “outperform” from “neutral,”
saying it will benefit from the launch of new games this summer
and its expansion into mobile devices.
In M&A; news, Talbots Inc, the women’s apparel
retailer, struggling with declining sales and high debt, will be
bought by longtime suitor Sycamore Partners for $193.3 million,
a price that is lower than the private equity firm’s previous
offers. The shares jumped 85 percent to $2.38.
