Broadest Russell 2000 Strength Since ‘90s Signals Caution

Smaller U.S. companies are putting on their biggest show of stock-market strength in more than a quarter century. Ninety-three percent of the Russell 2000 Index’s component stocks closed Monday above their 200-day moving average, a gauge of price trends, according to data compiled by Bloomberg since 1995. The reading exceeded a peak of 92.8% that was set in September 2003. “We haven’t seen anything like it in the small caps in recent years,” Frank Cappelleri, chief market technician at Instinet LLC, wrote in a report Tuesday. It’s a sign that further gains any time soon will be a challenge, he added.