| NEW YORK, June 10
NEW YORK, June 10 Small- and mid-capitalization
stocks declined on Friday, as unease increased about
sluggishness in the economy and the end of the Federal
Reserve's stimulus, and more downside was expected.
The Fed's second round of bond buying, or QE2, is scheduled
to end this month, and while some analysts see little effect
from the event, others say it's a further cause for worry in a
market that is struggling to hold recent gains.
Recent U.S. economic data has been mostly weaker than
expected, suggesting the recovery from the nation's worst
downturn since the 1930s could take longer than expected or the
economy could be getting weaker.
"A lot of people expected that by the end of QE2 we would see an economy that is accelerating, and we're seeing the
opposite. So you're left with, 'What happens next?' I don't
think the Fed will be able to make a convincing case of why QE3
would work this time," said Shawn Hackett, president at Hackett
advisors in Boynton Beach, Florida.
"We're in a period where we should be in an extended
correction," he said.
Industrials were among leading decliners, including Terex
Corp (TEX.N), down 2.9 percent at $25.13.
Also, shares of Corinthian Colleges Inc COCO.O fell 6.6
percent to $4.31 after Deutsche Bank cut its price target on
the company. Career Education Corp (CECO.O) was down 4.2
percent at $21.22.
The S&P MidCap 400 index .MID was down 0.9 percent while
the S&P SmallCap 600 index .SML was down 0.9 percent. In
comparison, the benchmark S&P 500 .SPX fell 0.9 percent.
The mid-cap index is down about 7.7 percent since May 2,
after which major indexes began to lose ground.
Among decliners were shares of LaBranche & Co LAB.N, down
2.3 percent at $3.78, after Standard & Poor's said it will be
replaced by OYO Geospace Corp OYOG.O, up 4.3 percent at
$94.98, in the S&P SmallCap 600 index. American Medical Systems
Holdings AMMD.O was flat at $29.95 after S&P said it will be
replaced by NuVasive Inc (NUVA.O), up 2.4 percent at $33.62.
Endo Pharmaceuticals Holdings Inc (ENDP.O) is acquiring
American Medical Systems while Cowen Group Inc (COWN.O) is
acquiring LaBranche. Final approvals are still pending.
(Editing by Padraic Cassidy)