US SMALL/MIDCAPS-Stocks end lower; profit warnings a worry
NEW YORK |
NEW YORK Oct 5 (Reuters) - Small- and mid-capitalization stocks closed flat to lower o n Friday, with shares of Zynga falling 12 percent after it slashed its 2012 outlook for a second time.
A spate of recent profit warnings from companies have added to anxiety about the upcoming corporate earnings period. Standard & Poor's 500 earnings kick off next week, with results from Alcoa, shortly before the small- and mid-cap reports begin in earnest.
Shares of Zynga fell 12 percent to $2.48 after the social games maker cut its 2012 outlook for a second time on the poor performance of its live Internet games and the writeoff of an acquisition.
Shares of Facebook, which derives over a tenth of its revenue from fees paid by Zynga, fell 4.7 percent to $20.91.
Earlier this week, network gear maker Adtran said seasonality and a weak spending environment may lead to a fall in fourth-quarter revenue. Its shares slipped 2.9 percent to $16.19.
Doug Cote, chief market strategist of ING Investment Management in New York, warned investors against getting too pessimistic on earnings.
"There certainly is a risk of negative corporate earnings but there are mitigating factors right now, and the biggest factor is the unprecedented global monetary stimulus that happened over the past few weeks. And what I see is that is starting to have a positive influence," he said.
Among some positive reports on the economy lately, data on Friday showed the U.S. jobless rate unexpectedly dropped to 7.8 percent in September.
The S&P MidCap 400 index was up 0.02 percent while the S&P SmallCap 600 index was down 0.2 percent. In comparison, the benchmark S&P 500 was down 0.03 percent.
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