US SMALL/MIDCAPS-Small stocks boosted by M&A

NEW YORK, Sept 12 (Reuters) - Small and mid cap technology shares were boosted by Broadcom's $3.7 billion bid for NetLogic on Monday, while a report China may buy Italian bonds helped ease fears over the eurozone's debt crisis.

Shares in NetLogic Microsystems Inc NETL.O rocketed more than 50 percent on Chipmaker Broadcom's (BRCM.O) plans to buy the company and expand its lineup of chips. The S&P small cap semiconductor index .6GSPSE rose 1.7 percent.

Italy has asked China to make "significant" purchases of Italian debt, the Financial Times reported on its website on Monday. The news helped lift some of the gloom that had weighed on equity markets for most of the day. [ID:nS1E78B1JM]

Yet even with mergers and acquisitions activity, equity markets are unlikely to find a floor until debt woes and recession fears ease in developed economies, said Shawn Hackett, president at Hackett advisors in Boynton Beach, Florida.

"M&A can certainly provide some temporary stability or some pockets of strength but it will be very short lived if the macro continues to deteriorate as it has been," he said.

The S&P MidCap 400 index .MID rose 0.6 percent while the S&P SmallCap 600 index .SML added 0.7 percent. In comparison, the benchmark S&P 500 .SPX gained 0.7 percent.

Small and mid cap stocks have been among the hardest hit by fears the eurozone's debt crisis could push the world into a recession. So far this year the mid cap index has fallen 8.8 percent while the small cap index is down 10.5 percent.

In other company news, Tenet Healthcare Corp (THC.N) said its profits were squeezed by an influx of poorer patients to its hospitals and lower reimbursements for its Medicare patients. The shares fell 10 percent to $4.52. [ID:nL3E7KC297]

Colfax Corp (CFX.N) shares fell 8.6 percent to $21.06. The company agreed to buy British toolmaker Charter International CHTR.L for 1.53 billion pounds ($2.4 billion) in cash and shares, after beating off rival bidder Melrose (NYN.L). [ID:nL3E7KC1HE]

Friendfinder Networks Inc (FFN.O) rose 5.5 percent to $2.86 after the publisher of adult magazine Penthouse, said it will buy social commerce website JigoCity for up to $65 million in stock and warrants, to tap into fast-growing social networking markets like China and Asia-Pacific. [ID:nL3E7KC25W]