Small-Cap Russell Dominates Stock Market Hump Day

Image Source: Markets were up across the board today, with the blue-chip Dow notching yet another all-time closing high. The Dow gained +337 points, +0.79%, for the session. The S&P 500, which had last posted an all-time closing high on Monday, was just short today, up +0.47% but 14 points off its Monday closing high.The tech-heavy Nasdaq, which hasn’t reached a new closing high since July of this year, was the relative laggard among top indexes: +0.28%. The small-cap Russell 2000, three full years off its all-time highs, outperformed the group, +1.73% for the session.

Why Did Small-Caps Run Away with the Trading Day?

Normally a good run on small caps for a day means we’re seeing a meaningful drop in bond yields, but that’s not currently the case. With the 10-year getting comfortable just above +4% (+4.014%) and the 2-year — a month after crossing back out of a long-term inversion — just below +4% (+3.933%). So why the big jump on the Russell today?Keep in mind the “soft landing” scenario continues to hold up. Defying most experts over the past year or two, we’ve managed to keep out of recession so far. Of course, there will always be potential overhangs, but we’re not seeing and direct risks to the U.S. economy at this stage.Also, many stocks in the Russell 2000 are small community banks, and we’ve seen big banks perform very well overall so far in Q3 earnings season. Market participants may feel the smaller players may get in on this action, as well. Small-cap retail has performed well on the day, too, with companies like Victoria’s Secret ( – ) up +6.6% in today’s trading.

CSX Comes Up Short in Q3

Trucking and logistics major CSX ( – ) missed estimates slightly on both top and bottom lines today after the close. Earnings of 46 cents per share underperformed the Zacks consensus by 2 cents, though it did post a year-over-year gain of +12%. Revenues of $3.62 billion were light the $3.68 billion expected, and this helped lead the stock down -3% in late trading. This takes the share price of CSX back into negative territory year-to-date.

Big Thursday for Economic Data, Earnings

Tomorrow morning, aside from normal Weekly Jobless Claims, we’ll see Retail Sales results for September and a new Philly Fed survey for October. Also Industrial Production and Capacity Utilization numbers will be out right before the bell, with Business Inventories and a new Homebuilder Confidence Index shortly after Thursday’s open.For Q3 earnings numbers, we’re looking for Taiwan Semiconductor ( – ) and Dow component The Travelers Companies ( – ) early and Netflix ( – ) and Intuitive Surgical ( – ) out after the close. Of these, TSM and Netflix bring Zacks Rank #2 (Buy)-ratings into their earnings report.More By This Author:Markets Up Ahead Of CPI, Jobless Claims ThursdayTop Stock Reports For Nvidia, Duke Energy & American Electric PowerTop Stock Reports For Walmart, Adobe & Caterpillar