Small-Cap, Nasdaq Stocks See Sharp Sell-Offs; USinternetworking, SS&C Technologies Slide
NEW YORK -- Small-capitalization and Nasdaq stocks fell sharply, although both groups ended the day above their intraday lows.</br></br>Stocks pushed lower at the opening following news that the second-quarter employment-cost index rose substantially more than it had in the first quarter, and by more than analysts had been expecting. The jump in employment costs, which often is seen as the first stage of an increase in overall inflation, has increased concerns that the Federal Reserve may see the need to raise interest rates again at its late-August policy meeting.</br></br>The Russell 2000 index of small-capitalization stocks fell 5.03, or 1.13%, to 441.58, having been down as much as 6.81, and the Nasdaq Composite Index, at 2640.01, tumbled 65.83, or 2.43%, after posting an intraday loss of 78.04.</br></br>The increased potential for higher rates took its toll on the small-cap and Nasdaq markets' two important sectors, technology and financial services.</br></br>Internet telephony services company Net2Phone was the star among the day's IPOs, putting in a 77% first-day increase despite the market's jitters. The Hackensack, N.J., firm closed at 26 9/16 on Nasdaq, up from its offering price of $15 a share.