Reuters
By Ryan Vlastelica
NEW YORK | Mon Oct 1, 2012 11:57am EDT
Oct 1 (Reuters) – Small cap stocks rallied on Monday as a surprise expansion in the U.S. manufacturing sector quieted concerns about economic growth at a time when central banks are seen continuing to support markets.
Sectors tied to growth were among the top gainers of the day, giving a strong start to the fourth quarter of trading.
The U.S. manufacturing sector expanded in September, shaking off three months of weakness as new orders and employment picked up, an Institute for Supply Management report showed.
“The U.S. economy is growing at a slow pace but it is still growing. The ISM number suggests that things are not that bad,” said Adam Sarhan, chief executive officer at Sarhan Capital in New York. “Despite a recent spate of weaker-than-expected data from across the world, markets are looking forward.”
Energy and material stocks were stronger on the day, lifted as the strong data indicated an improved demand picture ahead. Quicksilver Resources climbed 3.2 percent to $4.22 while Forest Oil was up 2.5 percent at $8.66. Century Aluminum climbed 4.2 percent to $7.45.
Mid-cap shares were flat on the day, pressured after Janney downgraded Wendy’s Co to “neutral” from “buy,” sending shares down 5 percent to $4.30. The stock was the biggest decliner among mid-caps.
The S&P MidCap 400 index slipped 0.3 percent while the S&P SmallCap 600 index gained 0.7 percent. In comparison, the benchmark S&P 500 rose 0.9 percent.
In company news, Ceradyne Inc surged 43 percent to $34.91 after 3M Co agreed to buy the company for $847 million.
Gordmans Stores Inc dropped 25 percent to $13.85 after it cut its profit outlook, citing slowing sales.
New Oriental Education & Technology Group Inc rose 5.8 percent to $17.63 after it said it had completed a review of allegations that its accounts were fraudulent and found “no significant evidence” that they were true.
Other education companies were also stronger, with DeVry Inc up 6.4 percent to $24.23 and Strayer Education up 5 percent to $67.56.
URL: http://www.reuters.com/article/2012/10/01/markets-stocks-smallmid-idUSL1E8L1DP020121001