NEW YORK, Oct 25 (Reuters) - Strong earnings and more merger activity continued to boost small and midcap stocks on Monday following six consecutive weeks of gains.
A top deal involved Carlyle Group [CYL.UL], which is in talks to buy midcap CommScope Inc (CTV.N) for about $3 billion in the latest sign of a resurgence of acquisitions by private equity firms. For details see [ID:nSGE69O090].
CommScope shares soared more than 30 percent to $30.16.
Pre-Paid Legal Services Inc PPD.N said it was evaluating a $592 million buyout offer from an unnamed private equity firm, sending up its shares 11.8 percent to $62.74. [ID:nSGE69O0I8].
Earnings continued to surpass expectations.
Sohu.com Inc (SOHU.O), up 13.9 percent to $74.93, said its quarterly profit rose more than analysts had forecast as its online games continued to be popular among the Internet portal’s target audience. [ID:nSGE69O076].
“Earnings in general have been very favorable,” said Ken Farsalas, portfolio manager at Oberweis Asset Management in Lisle, Illinois.
“The performance of the small caps is indicative of (an overall) strong market.”
A. Schulman rose 6.9 percent to $22.27 and Sykes jumped 12.3 percent to $16.86.
The S&P MidCap 400 index .MID rose 0.54 percent while the S&P SmallCap 600 index .SML advanced 0.48 percent. In comparison, the benchmark S&P 500 .SPX gained 0.21 percent.
On Friday, both small and midcaps notched their sixth straight week of gains.
Shares of Savient Pharmaceuticals Inc SVNT.O lost half their value after the company said it is yet to make any headway on its plan to sell itself.
Its shares dropped 44.4 percent to $12.07.
Editing by Kenneth Barry