US SMALL/MIDCAPS-Education stocks get an ‘F’

NEW YORK,Oct 14 (BestGrowthStock) – U.S. education stocks slumped
to their lowest in more than two years in a weak small- and
mid- cap market on Thursday after Apollo Group (APOL.O: )
withdrew its 2011 outlook and forecast sharp falls in student
enrollments.

Apollo said new regulatory proposals would impact its
ability to attract students. Its shares fell 25.5 percent to
$36.90 and hit the rest of the sector: Corinthian Colleges
(COCO.O: ) fell 20.9 percent while Career Education (CECO.O: )
dropped 15.9 percent. [ID:nSGE69D0J3]

Herbert May, head of equity capital markets at Signal Hill,
who specializes in the for-profit education sector, said the
stocks were undergoing a re-pricing but remained upbeat about
the sector’s prospects.

“Clearly there is tremendous tension between investors and
the government,” he said. “These stocks will find a level and
investors will gain some visibility once we have clarity on the
negotiated rule making.”

The S&P education index (.15GSPEDUS: ), which track the
performance of nine U.S. for-profit education companies, lost
nearly 19 percent. On an intraday basis the index was at its
lowest since April 2008.

The broader market was week as nationwide confusion over
mortgage foreclosure procedures hit banking stocks. The S&P
MidCap 400 index (.MID: ) fell 0.7 percent while the S&P SmallCap
600 index (.SML: ) fell 0.6 percent. In comparison, the benchmark
S&P 500 (.SPX: ) lost 0.6 percent.

Small and mid cap banks were also caught up in the general
weakness in the sector. FirstMerit Corp (FMER.O: ) fell 3.5
percent to $18.22, while Susquehanna (SUSQ.O: ) fell 2.6 percent
to $8.66. The S&P small cap banking index (.6GSPBK: ) lost 1.7
percent of its value.

In other corporate news, shares in Stereotaxis Inc (STXS.O: )
fell 4.8 percent to $3.92 after the medical device maker said
it sees weaker third and fourth quarter sales, and expects 2010
revenue to grow in the high single digit percentage range, down
from previously expected mid-20 percent. [ID:nSGE69D0KX]

On the upside, Fairchild Semiconductor International
(FCS.N: ) rose 7.7 percent to $10.19. The chipmaker posted a
better-than-expected quarterly profit helped by its continuing
shift to high-margin products, and said it sees margins
climbing further. [ID:nSGE69D01N]

Zagg Inc (ZAGG.O: ) jumped 41.6 percent to $7.28, hitting a
year-high a day after the maker of protective covers for mobile
devices forecast a strong quarter and finish to the year,
helped by the burgeoning growth in smartphones and tablet PCs.
[ID:nSGE69D0K2]

(Reporting by Edward Krudy; Editing by Chizu Nomiyama)

US SMALL/MIDCAPS-Education stocks get an ‘F’