US SMALL/MIDCAPS-Stocks rebound after sell-off, M&A helps

By Ryan Vlastelica

NEW YORK, June 30 (BestGrowthStock) – Mid- and smallcap stocks
advanced on Wednesday, a day after slumping to more than
four-month lows, as a pair of buyout deals spurred hopes for
further merger and acquisition (M&A) activity.

Boeing Co (BA.N: ) agreed to buy warfare communications and
electronics systems manufacturer Argon ST Inc (STST.O: ) for
about $775 million. Celgene Corp (CELG.O: ) said it would buy
Abraxis BioScience Inc (ABII.O: ), which makes an innovative
chemotherapy treatment, for $2.9 billion in cash and stock. For
details, see [ID:nSGE65T0FN] and [ID:nSGE65T0EQ]

Argon shares surged 40 percent to $34.26 on the news while
Abraxis advanced 22 percent to $74.60. Boeing, a Dow component,
was up 1.4 percent at $63.79 as Celgene sank 4.1 percent to
$51.09.

“Today’s M&A activity is reflective of a convergence of
strong balance sheets meeting low valuations,” said Lawrence
Creatura, portfolio manager at Federated Clover Investment
Advisors in Rochester, New York.

“In today’s environment, where growth is scarce, growth by
acquisition only looks more attractive. It’s realistic to
expect M&A activity to continue along the lines of what we’ve
seen this year.”

The S&P MidCap 400 index (.MID: ) gained 1.1 percent while
the S&P SmallCap 600 index (.SML: ) added 1 percent. In
comparison, the benchmark S&P 500 (.SPX: ) was up 0.4 percent.

In Tuesday’s session, the three indexes tumbled more than 3
percent as concerns about credit and the global economy drove
investors away from risky assets.

On the earnings front, both Lindsay Corp (LNN.N: ) and OMNOVA
Solutions Inc (OMN.N: ) rose after reporting better-than-expected
quarterly results. [ID:nSGE65R0EX] and [ID:nASA00HJ6]

Lindsay rose 2 percent to $33.05 while OMNOVA advanced 6.9
percent to $7.77.

On the downside, American Greetings Corp (AM.N: ) reported
first-quarter earnings that missed expectations. The stock fell
as much as 8 percent, but later pared those losses to trade at
$19.46, off 0.2 percent. [ID:nSGE65O0GM]

Also trading lower, Cowlitz Bancorp (CWLZ.O: ) plummeted 41
percent to $2.40 after it said it was delisting from the
Nasdaq. [ID:nWNAB2195]

SuperGen Inc (SUPG.O: ) dropped 14 percent to $1.99 after it
said its experimental cancer drug failed to meet the main goal
in a late-stage trial. [ID:nSGE65T0I9]

Stocks

(Editing by Andrew Hay)

US SMALL/MIDCAPS-Stocks rebound after sell-off, M&A helps