The good news in the bond market fueled an exuberant rally on the stock market today, where the Dow Jones Industrial Average powered ahead by two and a quarter percent. The Nasdaq Composite and Russell 2000 small company index each reached record highs. Earlier this year, many mutual funds were having a tough time keeping up with the major indexes. But the tide has been turning, of late, due in part to the recent volatility in the stock market. New York editor Michelle Brier reports.
Many fund managers say they're turning more to the stocks of smaller companies.
Larry Cantor is a managing director of the Lexington fund. We feel now that investors are looking for value, they are turning to small cap securities. Irwin Kellner, president of Kellner Economic Advisors, says there's another reason. Today the Dow was lifted in part because some of the big, multinational companies, like Proctor and Gamble, did very well on a good inflation report, but some analysts say it could be a one-day wonder. Overall, small caps look cheaper and a better value.