Smaller stocks are win­ning again, but for how long?

Arkansas Democrat-Gazette - - MONEY&MARKETSEXTRA - By Stan Choe; Jenni Sohn

The stock mar­ket’s big­gest gains are once again com­ing from its small­est com­pa­nies, but the trend may not last much longer.

Smaller-com­pany stocks like Al­le­giant Travel and AK Steel have been soar­ing since late De­cem­ber and lead­ing the rest of the mar­ket, a sharp re­ver­sal from much of the win­ter, when smaller stocks were plung­ing more than the rest of the mar­ket.

The Rus­sell 2000 in­dex of small-cap stocks has jumped 19.8 per­cent since Christ­mas Eve ver­sus 16.2 per­cent for the big stocks in the S&P 500 large-cap in­dex, though nei­ther has re­turned to the records they set late last year.

Bed Bath and Be­yond, for ex­am­ple, has surged 46.3 per­cent since Christ­mas Eve, helped by a stronger-than-ex­pected earn­ings re­port where it said it’s ahead of plan in even­tu­ally re­turn­ing to profit growth. Be­sides earn­ings re­ports, smaller stocks have also been ben­e­fit­ing in re­cent weeks from re­duced wor­ries that the Fed­eral Re­serve will raise in­ter­est rates too quickly.

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