US SMALL/MIDCAPS-Cyclicals rise after data underpins economy hopes
By Ryan Vlastelica
NEW YORK | Tue Feb 28, 2012 1:18pm EST
NEW YORK Feb 28 (Reuters) - Cyclical industries in the small and mid-capitalization space rose on Tuesday as some data reinforced the view that the U.S. economy would continue to improve.
Shares were broadly flat, weighed by weakness in defensive names, as investors found little reason to buy aggressively and extend recent gains.
Small-cap stocks are up 10.6 percent so far this year while mid-caps are up about 12 percent, with their nearly uninterrupted gains prompting some investors to call for a pullback. The S&P 500 is up 9 percent.
U.S. consumer confidence rose more than expected in February to hit a one-year high, according to an industry survey. The reading is key because consumer spending accounts for roughly two-thirds of U.S. economic activity.
"Any news like this will give investors a reason to buy, but after the gains we've had we need something bigger to get people to really start buying," said Michael Matousek, senior trader at U.S. Global Investors Inc. in San Antonio, Texas, which manages about $3 billion.
Matousek said a pullback in stocks is likely, although many traders would use a dip as an occasion to buy.
The S&P MidCap 400 index dipped 0.1 percent while the S&P SmallCap 600 index was flat. The benchmark S&P 500 rose 0.3 percent.
Among mid-cap sectors, consumer discretionary led, gaining 0.4 percent, followed by information technology , up 0.3 percent. The weakest groups were utilities , which fell 1 percent, and telecom, down 0.5 percent. Both utilities and telecom stocks are considered defensive.
Among the most active consumer discretionary names, electro-optical products maker Gentex Corp gained 6 percent to $28.02 while Office Depot surged 16.5 percent to $3.52 after reporting better-than-expected results.
Great Plains Energy Inc was one of the biggest utility drags, falling 2.9 percent to $20.07 a day after reporting fourth-quarter results.
Also in company news, Domino's Pizza Inc surged 12 percent to $37.55 after posting forecast-beating results. The company also said it plans to refinance its existing securitized debt, a process that may include a special dividend for shareholders and more stock buybacks.
Apollo Group, the largest for-profit college in the United States, slumped 12 percent to $45.13 after it said it expects to sign up fewer new students in the second quarter.
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