US SMALL/MIDCAPS-Weak month ends amid global economy concerns

NEW YORK, July 31 (Reuters) - Small- and mid-cap stocks closed out a weak month of July on Tuesday amid concerns about the global economy and fears of escalating debt crisis in the euro zone.

For the day, the S&P MidCap 400 index fell 0.7 percent and the S&P SmallCap 600 index lost 0.4 percent. In comparison, the benchmark S&P 500 fell 0.4 percent.

For the month, however, the S&P 500 gained 1.3 percent while the mid-cap stocks index dipped 0.1 percent. Small-cap stocks were down 0.8 percent in July.

Smaller-cap stocks tend to be more vulnerable to economic weakness. On Tuesday, UBS lowered its U.S. GDP expectations "to reflect both uncertainty in European as well as the fiscal cliff." Growth estimates for the third and fourth quarter fell to 1.5 percent and 1.8 percent, respectively, from previous estimates of 2.3 percent and 2.8 percent.

"According to our work, every 1 percent change in GDP corresponds to a 3-4 percent change in (corporate) revenues and a 4-5 percent change in (corporate) earnings. Further, 1.5-2.0 percent real GDP represents stall speed for earnings, consistent with low single-digit growth rates," said Jonathan Golub, chief strategist at UBS in New York.

"As such, our updated GDP forecasts imply a meaningful deterioration in corporate results," Golub said.

Among individual stocks, shares of Shaw Group Inc slid further below the price implied by a $3 billion takeover offer from Chicago Bridge & Iron Co, as provisions in the merger deal compounded concerns that it could fall through. Shaw Group shares ended down 6.1 percent at $38.95.

Accretive Health Inc jumped 36 percent to $13.58 after the company settled a federal lawsuit with Minnesota, removing an overhang that cost the firm a customer and much of its market value.