Russell Rises For Fourth Week in Row

By KRISTINA PETERSON

Small-capitalization stocks tumbled after the Securities and Exchange Commission's civil-fraud charges against Goldman Sachs Group ignited fears that risks in the market have been ignored.

Small-caps started sinking Friday after the SEC alleged that Goldman Sachs had misled investors about a financial product tied to subprime mortgages.

While the charges sent large-cap financials into a tailspin, small-cap financials weathered the day's events slightly better. Investors said the fears that regulators could be hunting for other targets didn't apply to smaller banks and financial companies.

The Russell 2000 index of small-capitalization stocks dropped 9.59 points, or 1.3%, to 714.62, but rose for a fourth week in a row. The Standard & Poor's SmallCap 600-stock index fell 4.10 points, or 1.1%, to 378.78. The index is up 14% year to date and rose for a seventh consecutive week, the longest streak since the seven-week period that ended May 8, 2009.

The energy sector took the biggest hit, hurt by crude-oil prices that fell 2.7% to slightly more than $83 a barrel. Oil-and-gas company Swift Energy shed $1.87, or 4.9%, to $36.27. PetroQuest Energy, an oil-and-gas explorer, slid 22 cents, or 3.7%, to 5.72. Both are traded on the New York Stock Exchange.

Health care was the only sector in the black. Magellan Health Services, a manager of behavioral health care, rose 1.33, or 3.3%, to 42.03.

Health-care software company Phase Forward jumped 3.72, or 28%, to 16.80 after large-cap business-software company Oracle said it plans to buy the Waltham, Mass., company in a transaction valued at about $685 million.

Film company Lions Gate Entertainment (NYSE) rose 50 cents, or 7.9%, to 6.87, after activist investor Carl Icahn raised his offer to buy the company. Separately, billionaire entrepreneur Mark Cuban disclosed he holds a 5.4% stake in Lions Gate, according to a filing with the SEC.

Mesabi Trust (NYSE) a New York royalty trust that gets its income from a Minnesota iron mine, tumbled 3.16, or 13%, to 20.74, after slashing its quarterly distribution.

Ladish, which makes jet engine, aerospace and industrial components, jumped 2.38, or 10%, to 25.42 after its first-quarter profit soared.