* Russell 2000 approaches correction territory again
* J.C. Penney, Nordstrom soar after results
* Housing starts jump in April
* Indexes down: Dow 0.2 pct, S&P 0.3 pct, Nasdaq 0.5 pct
(Updates to open)
By Ryan Vlastelica
NEW YORK, May 16 U.S. stocks edged lower on
Friday, with the Dow and S&P 500 on track for their third
straight daily decline as small-cap stocks once again
underperformed the market.
The Russell 2000 index of small companies briefly
entered correction territory on Thursday, defined as a 10
percent decline from a recent high. It subsequently pulled back
and is currently 9.8 percent below its high, suggesting that
level is serving as support.
Still, the index is solidly under its 200-day moving
average, a sign of weak momentum, and investors are worried that
prolonged weakness in small names could be a precursor of
broader losses. The Russell is down 0.5 percent on Friday.
"We're in the middle of a rolling sector correction, where
some areas of the market are performing better than others,"
said Jerry Harris, president of asset management at Sterne Agee
in Birmingham, Alabama, who noted that the S&P 500 hit an
all-time record on Tuesday.
"The weakness we're seeing in the Russell gives us an
opportunity to buy those names at a discount, and sets them up
for a healthy recovery later this year."
General Motors Co fell 1.2 percent to $33.95 after
the Department of Transportation said U.S. official would make a
"major announcement" as part of its investigation into GM's
handling of a vehicle recall. CNBC reported that GM would enter
into a consent decree and pay a substantial fine.
The Dow Jones industrial average was down 26.68
points, or 0.16 percent, at 16,420.13. The Standard & Poor's 500
Index was down 5.44 points, or 0.29 percent, at 1,865.41.
The Nasdaq Composite Index was down 22.00 points, or
0.54 percent, at 4,047.29.
For the week, the Dow is down 0.9 percent, the S&P is down
0.5 percent and the Nasdaq is off 0.5 percent.
A number of companies advanced on the back of strong
results. J.C. Penney Co and Nordstrom Inc both
jumped more than 10 percent after posting earnings a day earlier
that topped forecasts. Nordstrom was the S&P's biggest
Applied Materials rose 7.9 percent to $20.16 after
reporting revenue that was slightly ahead of expectations, while
Autodesk Inc raised its full-year revenue view, sending
shares up 5.3 percent to $50.36. Both results came out after the
market closed on Thursday.
Housing starts jumped 13.2 percent in April while building
permits hit their highest in nearly six years, offering hope
that the troubled housing market could be stabilizing. The PHLX
housing sector index gained 0.2 percent.
(Editing by Bernadette Baum)