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%.
