Stock Market Today: Small Caps Roar Despite Lousy Unemployment Data
A spike in weekly initial jobless claims reversed recent progress and weighed on blue chips, but the Russell 2000 set fresh records once again.


Hopes among investors for yet another round of federal stimulus were at least momentarily offset by a significant employment setback Thursday. But, while the major blue-chip indices yielded ground, small-cap stocks continued their red-hot 2021.
Initial jobless claims for the week ended Jan. 9 came in worse than expected, to 965,000, from 784,000 in the prior week.
"The increase in the pace of job separation initially peaked in the week ending December 12, when initial claims registered 892k, and then gradually subsided thereafter through the week ending Jan. 2," say Barclays analysts. "This week's increase reverses that improvement and leaves initial claims at their highest level since late August."

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
However, Brad McMillan, chief investment officer for Commonwealth Financial Network, says "the economic impact (of rising jobless claims) will be limited by the recently passed stimulus bill, which will provide support for those laid off and help preserve confidence and purchasing power."
A third stimulus bill could lend even more support. President-Elect Joe Biden is expected to unveil a COVID relief and vaccination plan tonight, and the package, which multiple reports tag at roughly $2 trillion, is expected to include additional direct payments to Americans.
The Dow Jones Industrial Average lost 0.2% to 30,991; Intel (INTC, +4.0%) was tops among its 30 components as Wall Street continued to cheer the ouster of its CEO, while Visa (V, -3.6%) led the way lower.
Other action in the stock market today:
- The S&P 500 declined by 0.4% to 3,795.
- The Nasdaq Composite slipped 0.1% to 13,112.
- Gold futures declined 0.2% to $1,851.40 per ounce.
- U.S. crude oil futures had another great day, improving by 1.3% to settle at $53.37 per barrel.
- Bitcoin prices, at $35,916 on Wednesday, improved to $39,633. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
Small-Cap Stocks Keep Soaring
Blue chips' meek performance stood in stark contrast to the Russell 2000, as the small-cap index didn't just top its previous high yet again -- it cleanly punched through it. The Russell's 2.1% advance Thursday, to 2,155, gives it a wild 9%-plus return just half a month into the new year.
"Investors have gravitated to small caps and value stocks, particularly as earnings growth, relative depressed valuations (after 13 years of underperforming against growth) and the prospect of stronger GDP growth, a weaker dollar and perhaps rising rates, or at least a yield curve steepening, have caught investors' attention," says James Gowen, chief investment officer, small-cap equities, at Spouting Rock Asset Management.
He points to heightened activity in initial public offerings (IPOs), as well as soaring returns for a number of clean energy stocks.
Gowen also notes that small caps aren't as well-covered by the analyst community as their larger brethren, but fortunately the pros do dedicate some bandwidth to scouring these explosive opportunities.
Here, we've outlined 11 of the most promising stocks in the entire Russell 2000, as determined by the analyst set. In many cases, these stocks have already developed a following because of their outsized 2020 gains, but they're largely expected to keep generating abundant returns as 2021 unfolds.
Kyle Woodley was long Bitcoin as of this writing.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Kyle Woodley is the Editor-in-Chief of WealthUp, a site dedicated to improving the personal finances and financial literacy of people of all ages. He also writes the weekly The Weekend Tea newsletter, which covers both news and analysis about spending, saving, investing, the economy and more.
Kyle was previously the Senior Investing Editor for Kiplinger.com, and the Managing Editor for InvestorPlace.com before that. His work has appeared in several outlets, including Yahoo! Finance, MSN Money, Barchart, The Globe & Mail and the Nasdaq. He also has appeared as a guest on Fox Business Network and Money Radio, among other shows and podcasts, and he has been quoted in several outlets, including MarketWatch, Vice and Univision. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.
You can check out his thoughts on the markets (and more) at @KyleWoodley.
-
If You'd Put $1,000 Into Berkshire Hathaway Stock 20 Years Ago, Here's What You'd Have Today
Berkshire Hathaway is a long-time market beater, but the easy money in BRK.B has already been made.
-
New SALT Cap Deduction: Unlock Massive Tax Savings with Non-Grantor Trusts
The One Big Beautiful Bill Act's increase of the state and local tax (SALT) deduction cap creates an opportunity to use multiple non-grantor trusts to maximize deductions and enhance estate planning.
-
If You'd Put $1,000 Into Berkshire Hathaway Stock 20 Years Ago, Here's What You'd Have Today
Berkshire Hathaway is a long-time market beater, but the easy money in BRK.B has already been made.
-
If You'd Put $1,000 Into Procter & Gamble Stock 20 Years Ago, Here's What You'd Have Today
Procter & Gamble stock is a dependable dividend grower, but a disappointing long-term holding.
-
Stock Market Today: Dow Dives 769 Points on Iran-Israel Conflict
Losses accelerated in afternoon trading amid reports Iran retaliated against Israel.
-
My Three-Day Rule for Investing: And If it Applies Now
Stock Market I've seen a lot in my career. Here's what I see now in the stock market.
-
Is It Time to Invest in Europe?
Stock Market Europe is being shaken out of its lethargy, militarily and otherwise, by Donald Trump's changes in U.S. policy. Should investors start buying?
-
Stock Market Today: Markets Celebrate Trump's Tariff Détente
Consumer discretionary stocks led 10 of the 11 S&P 500 sector groups well into the green.
-
Stock Market Today: Dow Jumps 674 Points in Friday's Relief Rally
The gains weren't limited to stocks, though, with gold futures closing above the $3,000 per ounce mark for the first time.
-
Stock Market Today: Stocks Drop on Trump's EU Tariff Threats
The White House said alcohol imports from the European Union could soon face tariffs of 200%.