US SMALL/MIDCAPS-Stocks slide on earnings, debt worry
NEW YORK, July 27 |
NEW YORK, July 27 (Reuters) - Small-cap and mid-cap stocks dropped on Wednesday, weighed down by a crop of weak corporate results and outlooks along with increasing investor anxiety created by a lack of progress in Washington on a debt deal.
Selling was broad-based, with each of the 10 major S&P sectors among both mid-caps and small-caps in negative territory, putting the respective indexes on pace for their worst weekly decline in nearly a year.
Mid-cap Tupperware Corp (TUP.N) fell 12.4 percent to $62.55 after the maker of food storage containers forecast third-quarter profit largely below market estimates as it continues to fight rising costs of raw materials like resin. For details, see [ID:nL3E7IR2PA]
Small-cap Stratasys Inc (SSYS.O) tumbled 22.1 percent to $29.57 after the maker of 3D printers and production systems, reported second-quarter revenue that missed Wall Street's expectations for the first time in more than a year. [ID:nL3E7IR3PY]
"There has been some weakness, or just a softness and that may just go along with how the economy is going," said Jason Clark, portfolio manager at AFAM in Aliso Viejo, California.
"We are not having straight up shoots. We are kind of muddling along, and there is a little drag and a little push and that may be how the earnings are working out, too."
Republicans and Democrats rushed to rework rival deficit reduction plans on Wednesday, but with the fate of both proposals heavily in doubt top lawmakers pursued a behind-the-scenes compromise to avert a crippling U.S. default. [ID:nN1E76P2HJ]
"The uncertainty that is out there obviously is troubling for people -- the thing with the debt ceiling and just our own fiscal structure in the country is, you have this overhang, this cloud," said Clark.
Both the S&P MidCap 400 index .MID and the S&P SmallCap 600 index .SML fell 2.1 percent. In comparison, the benchmark S&P 500 .SPX declined 1.3 percent. (Editing by Padraic Cassidy)
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