Hackett Advisors in the News

US SMALL/MIDCAPS-Weak outlooks push stocks lower

By Chuck Mikolajczak
NEW YORK, July 29 | Thu Jul 29, 2010 2:25pm EDT

(Reuters) - Mid- and small-cap stocks fell on Thursday after a round of disappointing earnings and weak forecasts provided further evidence of a slowing economy.

The S&P MidCap 400 index .MID lost 0.5 percent, while the S&P SmallCap 600 index .SML shed 0.3 percent. In comparison, the benchmark S&P 500 .SPX was off 0.4 percent.

Midcap Harsco Corp (HSC.N) dropped 13.6 percent to $23.20 after the provider of products and services to metal producers posted lower quarterly profit and cut its outlook.

Fellow midcap Kennametal Inc (KMT.N) lost nearly 1 percent to $27.89 after the industrial toolmaker reported better-than-expected profit but said fiscal 2011 earnings may come in below estimates.

The two companies were among a string of industrials that cautioned about the U.S. and global economies.

"We're looking to have slower growth in the back half of the year and so everyone -- whether you are a small or a large company -- has to be moderating expectations. That is fairly clear," said Shawn Hackett, president at Hackett Advisors in Boynton Beach, Florida.

"There has been some recalibration of those valuations back down to factor in a slower growth type of recovery."

Covance Inc (CVD.N) tumbled 22 percent to $38.72 after the clinical testing company said profit dropped 26 percent, matching estimates, and cut its 2010 earnings view for the second time, citing lower demand and profitability for its early-stage drug research services.

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