US SMALL/MIDCAPS-Stocks decline as Avnet, others warn on results
NEW YORK |
NEW YORK Oct 10 (Reuters) - Small and midcapitalization stocks slipped on Wednesday, dragged down by the latest warnings from companies including Avnet Inc as U.S. third-quarter earnings reports got under way.
Avnet, an electric parts distributor, forecast its first-quarter revenue at the lower end of its prior forecast as customers delayed spending. Its shares were down 4.3 percent at $27.35 while shares of rival Arrow Electronics were down 3.7 percent at $32.42.
Among others issuing disappointing forecasts, consumer products maker Helen of Troy Ltd cut its full-year 2013 profit view for the second time this year. The company also reported lower-than-expected third-quarter profit. Its shares dropped 11 percent to $28.45.
The high number of companies issuing negative outlooks in recent months -- with the negative-to-positive ratio for guidance from Standard & Poor's 500 companies at it worst since 2001 -- has kept investors anxious that third-quarter results have been hurt by slow economic growth in Europe and China.
The reporting period began with results from Dow component Alcoa after Tuesday's stock market close.
Alcoa reported a third-quarter profit before one-time charges that beat Wall Street's expectations, but Chairman and Chief Executive Officer Klaus Kleinfeld said the company had noticed a "slight slowdown" in some regions and markets. Alcoa also lowered its global aluminum consumption outlook to 6 percent growth from 7 percent previously for 2012.
"There are concerns out there about what growth is going to be," said Edward Hemmelgarn, founder, president and chief investment officer of Shaker Investments in Cleveland.
"Some of the areas that have really been hit hard over the last two, three weeks have been cyclical areas like semiconductors. They've really pounded some of those names down a lot, to the point where these are pretty cheap stocks."
The S&P midcap technology index ., down 1.2 percent, was among the weakest. The index is down 9 percent since mid-September.
The S&P MidCap 400 index fell 0.5 percent while the S&P SmallCap 600 index slipped 0.2 percent. In comparison, the benchmark S&P 500 was down 0.6 percent.
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