Markets mixed as South Korean economy shrinks, small caps lag

Markets were mixed on Thursday.

The S&P 500 was flat while the STOXX Europe 600 fell 0.2 percent.

Earlier in Asia, the Nikkei 225 rose 0.5 percent but the Shanghai Composite plunged 2.4 percent. The KOSPI fell 0.5 percent after a report showed that the South Korean economy shrank 0.3 percent in the first quarter.

In the US, a report showed that first-time jobless benefits surged to 230,000 in the week ended 20 April from 193,000 in the previous week but another report showed that orders for durable goods rose by 2.7 percent in March.

Still, a CNBC report noted that small cap stocks have lagged the S&P 500 recently. The Russell 2000 fell roughly 1 percent since late February even as the S&P 500 rose more than 4 percent.

“The small-cap weakness has become a favorite point of emphasis of the bears,” noted Ed Clissold, chief US strategist at Ned David Research. “From a macroeconomic view, small-caps tend to be more economically sensitive, so under-performance can be a recession warning.”