Heard on the street: Additions and deletions for Russell 2000 index of small stocks sent some issues gyrating
NEW YORK -- You've heard of triplewitching days in the stock market, during which stocks move wildly for no fundamental reason?</br></br>Now, we've got the Russell Rampage.</br></br>In one of the stock market's modern-day quirks, scores of small stocks (such as General Magic) have been momentarily rising in the past two weeks, while others (Crown Books) have been inexplicably falling. Such gyrations are almost certain to continue this week and to reach a climax on Friday.</br></br>Why? It's the annual "reconstitution" of the Russell 2000 index of small stocks, a once-harmless phenomenon that is becoming increasingly tricky for investors in the small-stock arena.</br></br>Some $13.9 billion is run by fund managers who merely try to match the Russell 2000 -- and who thus have no choice but to jump in or out of stocks being added or delisted. What's more, other fund managers who aim to beat the Russell benchmark base many of their decisions on what is in the index. What it all means is that small stocks, which can be swayed by just a few investors, are getting hit by relative herds of buyers or sellers.