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Wall Street Shows Risk Appetite With Small-Cap Profits Near Zero

  • Russell 2000 firms saw profits fall 90% in period: Goldman
  • Index’s performance is trailing the S&P 500’s this year
Manhattan As Cuomo Orders 75% Of New Yorkers To Stay Home From Work
Photographer: Michael Nagle/Bloomberg

For one of the starker examples of how much recovery-obsessed investors are willing to stomach lately, compare this week’s surge in small caps with first-quarter results the companies just finished reporting.

Weighted to service-oriented companies particularly hard hit by stay-at-home orders, the Russell 2000 saw per-share profits fall 90% from a year ago, several times more than members of the S&P 500, according to Goldman Sachs data. Meantime, before a hiccup on Thursday, the Russell 2000 Index had risen on eight of nine days in a rally exceeding 16%.