US SMALL/MIDCAPS-Shares fall broadly, led by financials

By Rodrigo Campos

NEW YORK, Oct 16 (Reuters) - Financial and industrial stocks were among the top drags in mid- and small cap indexes on Friday after disappointing results from bellwethers.

General Electric Co's (GE.N) weaker-than-expected revenue and Bank of America's (BAC.N) $1 billion loss drove investors away from equities. The flight from risk gave support to a rise in the dollar index .DXY, up 0.3 percent after four sessions of losses.

Rick Campagna, portfolio manager at Provident Investment Council in Pasadena, California, linked the losses to BofA's earnings and a soft report from Citigroup Inc (C.N) earlier in the week. Regional banks are prominent on next week's earnings schedule.

"Earnings haven't been bad but you still have some of the same problems with write-downs," he said. "The loss was a little higher based on (more) consumer write-downs and consumer defaults than some were expecting from Bank of America."

Sterling Financial Corp (STSA.O) shares fell 7 percent to $1.20 as KBW cut its price target on the stock to $1 from $2. Thursday, Sterling's shares fell more than 20 percent after the company's banking unit agreed to an order by U.S. regulators to cut nonperforming loans and improve its financial position.

The S&P Smallcaps financial sector index .6GSPF slid 1.4 percent.

The S&P MidCap 400 index .MID fell 0.8 percent and the S&P SmallCap 600 index .SML dropped 1 percent. The large cap S&P 500 .SPX lost 0.7 percent.

For the week, small caps gained 0.7 percent and midcaps added 0.9 percent.

Small cap Universal Forest Products Inc (UFPI.O) tumbled 8 percent to $37.85 a day after the wood products maker reported third-quarter revenue that missed expectations.

The S&P Smallcap industrial sector index .6GSPI fell 1.1 percent.

The rise in the dollar pressured shares in the basic materials sectors despite a rise in the Reuters/Jefferies CRB commodities index .CRB.

The S&P Smallcaps material sector .6GSPM fell 1.5 percent and the midcap sector .4GSPM lost 1.2 percent, though both are still up for the week. (Reporting by Rodrigo Campos; Editing by Kenneth Barry)