NEW YORK Aug 9 Small- and mid-cap shares rose on Monday after WellCare reported a better-than-expected quarterly profit, while the purchase of Superior Well Services boosted the energy services sector.
Shares of Superior Well Services Inc SWSI.O shot up more than 20 percent after Nabors Industries Ltd (NBR.N) said it would buy the oilfield services company for about $900 million. For details, see [ID:nSGE6780D1]
Superior Well was up at $22.02, while the small cap Energy Equipment and Services Industry Index .6GSPENS rose 1 percent. Also in the sector, Basic Energy Services Inc (BAS.N) gained 4.6 percent to $9.50.
"Corporate balance sheets are in good shape, corporate cash is at record highs, so the companies need to put money to work," said Rick Campagna, portfolio manager at 300 North Capital LLC in Pasadena, California.
Small- and mid-cap companies are ripe to be scooped up by larger companies looking to grow their revenue because "they tend to be in areas of the market where they can be tucked in fairly easily into large companies," Campagna said. "They get the sales without necessarily getting the expenses."
The S&P MidCap 400 index .MID rose 0.7 percent while the S&P SmallCap 600 index .SML advanced 0.8 percent. In comparison, the benchmark S&P 500 .SPX added 0.3 percent.
Mid-cap WellCare Health Plans Inc (WCG.N) jumped 6 percent to $29.20 after its profit beat estimates as it was helped by lower expenses. The health insurer also agreed to settle a shareholder class-action lawsuit. [ID:nSGE6780CD]
Also on the earnings front, E.W. Scripps Co (SSP.N) reported better-than-expected results and said improving business trends will continue into the second half of the year. Shares of the media conglomerate were up 8.8 percent at $8.40. [ID:nSGE6780F9]
Hog and pork producer Smithfield Foods Inc SFD.N added 1.6 percent to $15.10 after Goldman Sachs initiated coverage with a "buy" rating. The brokerage placed an overall "neutral" view on the U.S. protein segment. [ID:nSGE6780HU] (Reporting by Leah Schnurr; Editing by Andrew Hay)