NEW YORK, July 25 (Reuters) - Mid- and small cap stocks rose modestly on Wednesday after three straight sessions of 1 percent losses as some strong results gave investors reason to buy on weakness.
Equities have been pressured recently by some discouraging corporate outlooks and growing signs that Spain may need a bailout. While those concerns remained, investors used the recent declines of more than 3 percent to snatch up bargains in beaten down sectors.
“While the market is still wrestling with systemic risk from Europe, valuations have become so attractive that a lot of investors are seeing value, especially over the longer term,” said Erik Ristuben, chief investment officer at Russell Investments in Seattle.
Tech shares were the day’s biggest gainers for both small and mid-cap indexes, with both surging 1.6 percent. That ran counter to weakness in large-cap tech stocks, which was driven by disappointing results from Apple Inc .
Midcap tech shares were led by Riverbed Technology Inc , which soared 28 percent to $18.63 a day after forecasting third-quarter earnings and sales above expectations.
AOL Inc also climbed after swinging to a second-quarter profit. The stock rose 6 percent to $29.15.
“We’re seeing more value in mid- and small cap tiers where most companies have beaten estimates,” said Ristuben, who helps oversee about $140 billion in assets.
The S&P MidCap 400 index rose 0.3 percent while the S&P SmallCap 600 index was up 0.4 percent. In comparison, the benchmark S&P 500 rose 0.3 percent.
In a sign of how broader economic concerns continued to weigh, cyclical sectors were among the weakest of the day. The small-cap material sector fell 0.6 percent while mid-cap energy shares lost 0.4 percent.
In company news, Piper Jaffray Companies rose 7.1 percent to $20.95 after it said it would exit its money-losing operations in Hong Kong, the latest in a series of steps the investment bank has taken to cut costs.
RadioShack Corp plunged 30 percent to $2.54 after reporting a surprise quarterly loss. (Reporting by Ryan Vlastelica; Editing by Kenneth Barry)