US SMALL/MIDCAPS-Stocks fall as corporate outlooks stir concern
NEW YORK, July 11 |
NEW YORK, July 11 (Reuters) - Mid- and small-cap stocks fell on Wednesday as corporate outlooks continue to point to weaker earnings ahead.
Adtran Inc joined a list of larger companies including Cummins and AMD in painting a gloomy earnings outlook, after the network gear maker said it expects the slowing economy to hurt third-quarter revenue.
Adtran shares tumbled 15.4 to $23.01, the lowest price since February 2010, while midcap Ciena Corp, one of Adtran's rivals, fell 7.9 percent to $14.15.
Recent economic data has highlighted the fragile nature of the recovery, and earnings expectations, though already lowered, are leaving the door open for negative surprises.
"Large caps have given indications of what the landscape looks like and investors are applying what they are learning to the small caps," said Lawrence Creatura, portfolio manager at Federated Clover Investment Advisors in Rochester, New York. "The situation for a subset of stocks is that investors are expecting too much."
The S&P MidCap 400 index fell 0.31 percent while the S&P SmallCap 600 index lost 0.35 percent. The Russell 2000 index dropped 0.37 percent.
Shares of jeans makers Guess and True Religion Apparel each fell more than 6 percent a day after privately held Levi Strauss & Co reported its quarterly net profit slumped by more than a third.
VeriFone Systems Inc's shares rose 10.9 percent to $35.41 after it won a five-year contract to become an exclusive vendor for Washington, D.C.'s taxi meters.
S&P Dow Jones Indices said Savient Pharma will be ejected from the S&P SmallCap 600 after the close next Tuesday as its market capitalization dropped below $40 million. It will be replaced by Engility Holdings, a spinoff of S&P 500 component L-3 Communications.
Savient shares fell 3.7 percent to 52 cents.
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