Modest rise; lagging techs pare energy gains

Small-cap stocks remained higher into midday trading, propelled on the opening by climbing energy shares and optimism over another big pullback on inter-bank lending rates. At 12:31 p.m. ET, the Russell 2000 (NYSE:IWM) was up 6.10, or 1.16%, at 532.53.

An upside surprise on leading indicators data was another supportive element in the mix this morning, but appeared to garner very little market attention. The leading indicators report came in at plus 0.3%, well above the forecast for a dip of 0.2%.

Meanwhile, a morning speech by Federal Reserve Chairman Ben Bernanke came and went without too much fanfare, although the market may have found some solace Bernanke’s assertion that frozen credit markets were starting to thaw and that inflation worries have receded.

The big story so far today has been the energy arena following analyst upgrades on several key stocks and some potential merger and acquisition activity. Researchers at Oppenheimer & Co. raised their forecasts on a raft of oil companies, and the Energy Select Sector SPDR Fund was up about 5.5% into mid-session. Within the small-cap sphere, PrimeEnergy Corp. (Nasdaq:PNRG) was up about 16% while large-capper NRG Energy Inc. (NYSE:NRG) gapped higher and jumped some 21% after receiving a takeover off from Exelon Corp. (NYSE:EXC).

Other small caps of note include Allscripts-Misys Healthcare Solutions Inc. (Nasdaq:MDRX), which was up about 17%, trying to recapture huge losses suffered the last couple of weeks. Along the health line of thinking, WebMD Health Corp. (Nasdaq:WBMD) was up 22% on news that a merger has been terminated.

Technology shares have been lagging the overall market this morning, and have been a mild drag on small caps amid concerns that spending on technology initiatives is not out of the woods because of the slumping economy around the world. The tech-laden Nasdaq 100 Index was up just 0.8% at midday and key large-cap tech . . .

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