US SMALL/MIDCAPS-Agri sector outshines, materials lead stocks up
NEW YORK | Tue Aug 17, 2010 1:45pm EDT
17 (Reuters) - Better-than-expected U.S. industrial
production data and a rejected takeover bid boosted
shares in the materials sector, the top performers among
mid- and smallcap stocks on Tuesday.
showing sturdy growth in industrial output, implying
the economy has enough strength to keep growing, gave
a boost to basic materials shares.
agriculture and fertilizer stocks led gains as midcap
Intrepid Potash (IPI.N) jumped 7.1 percent to $25.65
after Potash Corp of Saskatchewan (POT.TO)(POT.N) rejected
BHP Billiton's (BHP.AX)(BLT.L) unsolicited $130 per
share cash offer. The rejection fueled takeover speculation
in the sector and a rebalancing of asset prices.
ag sector has been pressed all year until recently,
so there's tremendous value," said Shawn Hackett,
president at Hackett advisors in Boynton Beach, Florida.
you get a takeover at such a huge premium, from a pretty
sharp operator, that is a helpful catalyst to bring
valuation up to the surface and get money flowing back
midcap Chemicals industry index .4GSPPM rose 2.8 percent.
NewMarket (NEU.N) rose 5.6 percent to $105.62.
Quaker Chemical (KWR.N) jumped 6.3 percent to $33.43.
the larger investment opportunity is in the smaller
stocks, which he said take longer to react to a takeover
in the sector.
were China Agritech (CAGC.O), China Green Agriculture
(CGA.N) and Sprott Resources (SCP.TO). China Agritech
jumped 12.2 percent to $17.14 and China Green rose 5.6
percent to $11.45. Sprott was trading mostly flat on
the Toronto Stock Exchange.
Potash bid "someone just raised the bar and now
all the other stocks are going to start repricing higher
value for those fertilizer assets," Hackett said.
MidCap 400 index .MID rose 2.4 percent while the S&P
SmallCap 600 index .SML advanced 2.5 percent. In comparison,
the benchmark S&P 500 .SPX gained 1.9 percent. (Editing
by Todd Eastham)