NEW YORK, March 14 (Reuters) - Small- and mid-cap stocks dropped on Monday as Japan’s earthquake and tsunami sparked fears about the economic toll, with stocks with ties to nuclear energy among the hardest hit.
Japanese authorities scrambled to avert a meltdown at a stricken nuclear plant on Monday after a hydrogen explosion at one reactor and exposure of fuel rods at another. For details, see [ID:nL3E7EE2KY]
Midcap Shaw Group Inc SHAW.N, which helps build nuclear plants, tumbled 16.1 percent to $32.23. Smallcap Curtiss-Wright Corp (CW.N) dropped 7.1 percent to $34.90. Miner Uranium Resources Inc URRE.O plunged 26.9 percent to $1.70.
Even with a recent pullback in stocks light of tensions in the Middle East and North Africa, analysts expect nuclear-related stocks to have more difficulty rebounding as political pressure may intensify on the industry.
“The market has done well, people are spooked -- you had North Africa and now you have this, and if you need a reason to sell, this is as good as any,” said Tim Holland, co-portfolio manager, of the Aston/TAMRO Diversified Equity Fund in Alexandria, Virginia.
“These are the sort of dislocations that can present opportunities but even if the news is better than feared out of Japan, the headlines will give significant ammunition to those in Washington, D.C., that were never fans of nuclear in general.”
The S&P MidCap 400 index .MID shed 0.7 percent while the S&P SmallCap 600 index .SML lost 0.6 percent. In comparison, the benchmark S&P 500 index .SPX dropped 0.9 percent.
Midcap materials stocks were a bright spot, with the sector .4GSPM up 2.9 percent after Lubrizol Corp LZ.N agreed to be acquired by Warren Buffett’s Berskhire Hathaway Inc (BRKa.N) (BRKb.N) for $9 billion. Lubrizol shares jumped 28.9 percent to $134.38. (Reporting by Chuck Mikolajczak; Editing by Leslie Adler)