US SMALL/MIDCAPS-Green Mountain forecast misses, 3Com surges

NEW YORK Nov 12 (Reuters) - Mid- and small cap stocks fell on Thursday after a disappointing forecast from Green Mountain Coffee Roasters, but losses were limited as midcap 3Com Corp surged after Hewlett-Packard Co said it would buy the company.

3Com Corp COMS.O spiked up 31.5 percent at $7.48 but did little to help the S&P midcap technology sector, which fell 0.6 percent. For details, see [ID:nN11380084]

An increasing number of mergers and acquisitions have been viewed as a sign of economic improvement that should help support the market further.

"There's a lot of pent-up demand, a lot of money on the sidelines and a lot of M&A activity starting to pick up," said Adam Hutt, general partner of Leviticus Partners LP in New York.

Hutt noted, however, the market has priced in a lot of good news and a pullback was unsurprising.

For the year, the S&P MidCap 400 index .MID is up 28.3 percent, and the S&P SmallCap 600 index .SML has gained 14.5 percent, compared to a 20.2 percent gain for the broad S&P 500 .SPX.

Small cap Green Mountain Coffee Roasters Inc (GMCR.O) tumbled 10.2 percent to $68.14 after it gave a first-quarter earnings outlook that fell short of expectations. [ID:nBNG495622]

Advance Auto Parts Inc (AAP.N) slid 3.9 percent to $38.71 after the company reported quarterly results following Wednesday's closing bell and said it expects to take a per-share charge of 15 cents to 22 cents in fiscal 2009 due to store divestitures. On Thursday, Credit Suisse cut its price target on the company to $48 from $50. [ID:nWNAB4638]

Greenbrier Cos Inc (GBX.N) reported a surprise quarterly profit as margins were helped by cost cutting. But the railroad equipment supplier said it expects lower revenue for 2010 due to continued weakness in business conditions and its shares slipped 1.5 percent to $9.60. [ID:nBNG420811]

Also on the M&A front, Youbet.com Inc UBET.O jumped 11.6 percent to $2.69 the day after Kentucky Derby host Churchill Downs Inc (CHDN.O) agreed to buy the online horse betting company in a cash-and-stock deal. [ID:nBNG532423]

The S&P MidCap 400 index was down 1.6 percent, while the S&P SmallCap 600 index lost 2.2 percent. In the broader market, the S&P 500 .SPX was down 1.2 percent, pressured by falling oil prices and a stronger U.S. dollar. (Reporting by Leah Schnurr; Editing by Kenneth Barry)