Demand for small-cap stocks is increasing relative to established large-cap names, a divergence that signals continued risk appetite among investors.
The Russell 2000 index hit a new all-time high of 1,212.82 on Tuesday for the eighth time this year, surpassing its previous high set on Feb. 28.
So far in 2014, the Russell is up 3.5 percent, compared with an increase of 1.4 percent for the S&P 500 and a decline of 1.3 percent for the Dow. The is currently leading the market, up 4.3 percent.
"Investors are coming down cap to find growth, and are willing to accept more risk to pay up for some of that growth," says Craig Johnson, technical market strategist at Piper Jaffray. On a "technical measured objective, the Russell 2000 could trade as high as 1,450." The index settled at 1,208.65 on Tuesday, up 2.74 percent, or its best daily gain in more than a year.
Small-cap leadership is usually considered a bullish sign, according to market professionals, as the sector is often viewed as a gauge for domestic expansion.
"Participation in the market is growing as some investors play catch up after missing last year's rally," says Johnson. "We have a long-standing bullish position, and expect the S&P 500 to reach 2,100 this year." His firm is overweight consumer cyclical, technology and health-care stocks.
Since the market closed at a more-than-three-month low on Feb. 3, the Russell 2000 is up 10 percent, outperforming the rest of the major indexes.
Dating back to 1978, the average deviation between the Russell and the Dow has been about 1.50 percent in the first two months of the year. In 2014, however, the Russell has outperformed the Dow by more than twice the historical average.
According to Dan Greenhaus of BTIG: "The differences between the Dow and S&P 500 always come down to weightings. In the case of the Dow, which favors high-priced stocks, the negative year-to-date performance is mostly due to companies such as 3M, Goldman Sachs and Chevron, which have overwhelmed the more positive performance among other names such as Caterpillar and Disney."
Here's a look at some of the stocks behind the surge in the Russell 2000.
Russell 2000
| Ticker | Company | Last | %Chg. | YTD %Chg. | Mkt. Cap ($MM) |
| ICPT | Intercept Pharma. | 435.43 | 5.15 | 537.00% | 8,007 |
| FURX | Furiex Pharma. | 94.15 | -1.49 | 124.11% | 991 |
| ITMN | InterMune | 31.75 | 1.49 | 115.60% | 2,807 |
| INSY | Insys Therapeutics | 83.37 | 21.73 | 99.50% | 1,472 |
| PTCT | PTC Therapeutics | 33.86 | 4.57 | 99.50% | 952 |
| CTIC | Cell Therapeutics | 3.81 | 4.82 | 99.20% | 543 |
| FCEL | FuelCell Energy | 2.71 | 24.88 | 92.20% | 513 |
| GTAT | GT Advanced Tech. | 16.7 | 11.04 | 91.60% | 2,022 |
| NBIX | Neurocrine Biosci. | 17.82 | 6.9 | 90.80% | 1,256 |
| KPTI | Karyopharm Thera. | 41.67 | 6.68 | 81.80% | 1,162 |
| NLNK | Newlink Genetics | 38.41 | -1.71 | 74.50% | 1,005 |
| RENT | Rentrak Corporation | 65.38 | 2.38 | 72.60% | 773 |
| HZNP | Horizon Pharma | 12.99 | 1.56 | 70.50% | 842 |
| PVA | Penn Virginia | 15.59 | 2.97 | 65.30% | 990 |
| RLYP | Relypsa | 40.3 | 3.1 | 61.80% | 1,121 |
| GEVA | Synageva BioPharma | 103.99 | 2.59 | 60.70% | 3,116 |
| RCPT | Receptos | 46.56 | 1.97 | 60.60% | 989 |
| SUNE | SunEdison | 20.89 | 11.83 | 60.10% | 4,980 |
| ARII | American Railcar | 72.94 | 3.86 | 59.40% | 1,500 |
| AUXL | Auxilium Pharma. | 32.01 | 3.88 | 54.40% | 1,533 |
—By CNBC's Giovanny Moreano and Pradip Sigdyal. Follow Giovanny on Twitter: @giovannymoreano