May 15 - Wall Street suffered another bruising as the Russell 2000 small cap index fell into correction territory and the assault against tech stocks continued. Yields on the 10-year note dropped below 2.5 percent for the first time since October. Conway G. Gittens reports.
Look out below! The Russell 2000 index of small cap stocks - down 10 percent from its high - a level known on Wall Street as a correction. The rest of the market may have not broken down as much - but it is still ugly out there. A triple-digit loss wipes away the Dow's gain for the year, The S&P 500 broke below its 50-day moving average, and the Nasdaq has only risen four days this month. Nervous investors looking for a place to run found shelter in the bond pits - but that sent yields on the 10-year note below 2-1/2 percent for the first time since last October. That's worrisome, says Jonathan Corpina of Meridian Equity Partners. SOUNDBITE: JONATHAN CORPINA, SENIOR MANAGING PARTNER, MERIDIAN EQUITY PARTNERS (ENGLISH) SAYING: "Right now it feels like investors are confused as to why the 10-year and the market aren't trading in the correlation as they should. That adds to a little apprehension in the market. That adds to pressure on our markets and when investors see that they immediately start to take some short-term profits off the table, to get their positions a little smaller." Wal-Mart sent off alarm bells. The world's largest retailer saw its smallest rate of sales growth in nearly five years and the company's forecast for the current quarter is below estimates. So much for a post-winter rebound for the retail sector. Mixed economic data did not help. Homebuilder sentiment was expected to rebound this month along with warmer temperatures but it did not. Growth in business activity in the Mid-Atlantic region cooled off this month and Industrial Production fell last month by the biggest measure in a year and a half. But on the flip side, weekly jobless claims dropped to a seven year low and consumer prices jumped by the most in 10 months, which is actually a sign of economic growth. In corporate news: General Motors issuing more recalls - this time involving three million units around the world. GM will take a $200 million hit to cover the recalls. The fast food industry - hit with another workers' strike. Employees want to unionize and seek a pay hike to $15 an hour. Protests took place in several cities. Shares of McDonald's, Burger King, along with Taco Bell and KFC parent Yum Brands - all lower. Economic numbers out of members of the euro zone causing concern - sending stocks lower in Germany, France and the UK.