US SMALL/MIDCAPS-Small stocks hit by weak earnings

By Rodrigo Campos

NEW YORK, Nov 4 (Reuters) - Small-cap stocks were a notable weak spot on Wednesday despite a broader market advance following the Federal Reserve's decision to maintain interest rates near zero for "an extended period."

The Fed maintained its benchmark federal funds rate unchanged in a range of zero to 0.25 percent and said the economy had "continued to pick up" since its last meeting in September.

Gains were broad among midcap companies, but the more volatile small caps took hits in financials and consumer-related sectors. The S&P MidCap 400 index .MID gained 0.6 percent while the S&P SmallCap index .SML shed 0.1 percent.

There was a bit of back and forth in the market as people interpreted the Fed release, according to Dan Cook, senior market analyst at IG Markets in Chicago.

"It's still a weak recovery at best, and we still have a terrible employment situation," he said.

The S&P SmallCap Consumer Staples index lost 1.3 percent and the SmallCap Consumer Discretionary Index fell 1 percent.

Discretionary shares weakened after True Religion Apparel Inc (TRLG.O) said its quarterly profit missed estimates for the first time in a year due to rising expenses. It also cut its full-year forecast, sending shares down 24 percent to $20.24.

Shares of Solera Holdings Inc (SLH.N) jumped 13 percent to $36.44 a day after the provider of software and services to the auto insurance industry posted better-than-expected quarterly profit and raised its 2010 outlook. The S&P midcap tech sector .4GSPT gained 1.3 percent.

But STEC Inc shares (STEC.O) tumbled 37.4 percent to $14.49 after the memory manufacturer said EMC Corp (EMC.N), a key costumer, would carry 2009 inventory into 2010, putting STEC's first-quarter results at risk. [ID:nBNG522036].

Neutral Tandem Inc (TNDM.O) rose 7 percent to $23.36 after the provider of inter-carrier communications services posted a quarterly profit that beat estimates by a penny, and raised its full-year revenue outlook. [ID:nBNG467358]. The S&P small cap telecom services index .6GSPL gained 2.1 percent.

Pacer International Inc (PACR.O) shares soared 56 percent to $4.11 after the company posted a surprise third-quarter profit and said it has signed new arrangements with railroad Union Pacific (UNP.N). [ID:nBNG444794].

The large-cap S&P 500 index .SPX rose 1.1 percent. (Additional reporting by Edward Krudy; Editing by Kenneth Barry)