ECONOMY

Small Stocks Seek to Extend Winning Streak

Small-cap stocks have been on a tear since last fall, and some investors expect them to keep booming.

The index of small-cap stocks ended June with its ninth consecutive month of gains, its longest monthly winning streak since at least December 1986, according to Dow Jones Market Data.

The index has advanced 49% since the end of September 2020, when promising Covid-19 vaccine trials inspired confidence that the economic future was bright. The benchmark of large-cap U.S. companies has risen 30% during that time.

Companies that benefit from customers getting back to shopping and dining out have helped push the small-cap index to new highs. Clothing retailer Abercrombie & Fitch Co. ’s shares have risen 114% this year. The company reported in May that its business swung to a profit in its first quarter. Restaurant chain Cheesecake Factory Inc. said last month that its sales were beating pre-pandemic levels so far in the second quarter. Its shares have gained 36% in 2021.

The small-cap index includes the same business sectors as the S&P 500, but is weighted more heavily toward several segments that tend to be sensitive to the state of the economy, such as financial and industrial companies, according to data from Refinitiv.

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