| NEW YORK
NEW YORK May 25 Mid- and small-cap stocks
staged a late rally to close slightly lower on Tuesday, after
getting battered earlier in the session on a massive flight
from risk as worries about the global economy intensified.
Nervous investors sold equities across the board earlier
in the session, on worries over Europe's banking sector and as
short-term funding costs soared.
The S&P small- and midcap indexes hit their session lows
in the first 15 minutes of trading, both falling more than 3.5
"We bought a few things this morning, so maybe there were
others (also) thinking this was getting a little overdone,"
said Scott Billeaudeau, portfolio manager at Fifth Third Asset
Management in Minneapolis.
"There's some stocks that their fundamentals are still
good, that Europe doesn't matter to them," he said.
Indexes closed at or near session highs but were still
Among the top drags were shares of utility companies,
weighed by a 10 percent drop in UIL Holdings Corp UIL.N to
$24.02 after it agreed to buy three gas utilities from the
U.S. unit of Spain's Iberdrola SA (IBE.MC) for nearly $1.3
billion in cash, including debt. [ID:nSGE64O0GE].
The S&P small-cap utilities index .6GSPU fell 1.7
The S&P MidCap 400 index .MID lost 0.12 percent while
the S&P SmallCap 600 index .SML fell 0.44 percent.
In comparison, the benchmark S&P 500 .SPX eked out a
0.04 percent gain, also after a late-day comeback.
Among the day's biggest losers were AAR Corp (AIR.N)
shares, down 17.2 percent at $18.26 a day after the aviation
and defense supplier forecast fourth-quarter earnings below
Arkansas Best Corp ABFS.O shares tumbled 14.4 percent to
$22.26 after announcing late on Monday that union employees of
its subsidiary ABF Freight System voted down proposed changes
to their contract, which included a 15 percent reduction to
(Reporting by Rodrigo Campos; Editing by Jan Paschal)