US SMALL/MIDCAPS-Energy, materials lead sell-off

By Chuck Mikolajczak NEW YORK, Oct 30 (Reuters) - Mid- and small cap stocks tumbled on Friday in a broad sell-off as investors reduced holdings in riskier asset classes. Energy and materials stocks led the way, after data showed consumer spending remains tepid and sentiment soft, underscoring the fragility of the economic recovery. Smallcap Commercial Metals Co dropped 10.1 percent to $14.27 after the company posted fourth-quarter results that topped market expectations but said it expects pricing and shipments to fall in the first quarter. "You always expect basic materials to get hit hard when people worry about the economy," said Mark Connelly, an analyst at Sterne Agee in New York. The S&P MidCap Materials index shed 3.4 percent while the S&P SmallCap Materials index lost 3.6 percent. "We've had a big run here and there has been an awful lot of optimism that moved ahead of the economy." The S&P MidCap 400 index dropped 2.4 percent while the S&P SmallCap index lost 2.6 percent. By comparison, the large cap S&P 500 index fell 2 percent. Both the mid- and small cap indexes were on track for their second consecutive weekly decline and were on pace for a drop of more than 5 percent for the week. Energy stocks were the worst performing of the 10 S&P sectors, as the S&P MidCap Energy index shed 5.2 percent and the S&P SmallCap Energy index slid 4.3 percent. MidCap Arch Coal Inc dipped 5.2 percent to $21.91 after reporting third-quarter profit dropped as it sold less coal at lower prices. After the closing bell on Thursday, Standard & Poor's announced MSCI Inc will replace Priceline.com Inc in the S&P MidCap 400 index on a date to be announced. (Reporting by Chuck Mikolajczak; Editing by Kenneth Barry) ([e-mail]; [phone]; Reuters Messaging:rm://[e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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