Stocks Lurch Higher But Volume Lags Badly


Stocks lurched higher Thursday amid news that Spain enacted a deficit-cutting budget and hopes for new China stimulus. But volume lagged, giving the impression that the big-money funds didn’t have their hearts in it.

The Nasdaq rose 1.4%, the S&P 500 1% and the Dow Jones industrial average added 0.5%. Volume fell 2% on the Nasdaq and 17% on the NYSE, according to preliminary data.

The gains broke some losing streaks among the major averages. the S&P 500 had lost ground for five straight days, the Dow for four and the Nasdaq for three.

News from the U.S. economy was mixed: Initial claims for jobless benefits fell more than expected, suggesting an improved job market. But a poor report on durable goods sales and weak pending home sales did not add to the picture of a healthy economic recovery.

Cirrus Logic (CRUS) climbed 5% with moderately above-average volume and regained its 50-day moving average, breached Wednesday. It ended a six-session slide. Cirrus sold off in big volume in recent sessions.

Bally Technologies (BYI) rallied 4% to a five-month high in fast trade. The stock cleared a 47.84 buy point from a handle in a consolidation. Bally’s pattern can also be interpreted as a shallow double-bottom base. The gaming equipment maker has had some tough times in recent years and carries a heavy debt load. But it has now delivered profit growth of 12% to 56% in the past four quarters. Revenue grew 9% to 20% in recent periods.

Select Comfort (SCSS) reversed higher and rose 3%. It erased nearly all of Wednesday’s drop, although volume was higher on the way down than on the way up. Select Comfort cleared a 28.35 buy point from a cup-with-handle base Aug. 7.

Mortgage services software maker Ellie Mae (ELLI) climbed 4%. The stock ended Wednesday down 9% so far for the week and just above its 50-day moving average. The stock is testing its 10-week moving average.

Rentech Nitrogen Partners (RNF) rallied 3% and retraced nearly all of Wednesday’s drop. The stock cleared a 28.91 buy point from a cup-with-handle base July 5 and has climbed 30%. Rentech, which makes fertilizer and industrial products, has shown profit growth of 145% to 467% in recent quarters. But sales dipped 5% in the latest period.

Mellanox Technologies (MLNX) gapped up and rallied 3% in average trading. The stock has sold off hard in recent sessions. It closed below its 50-day line for the first time in two months Tuesday. But the stock is now getting close to regaining that line.

On the downside, Chinese software-security company Qihoo 360 Technology (QIHU) reversed early gains and fell 1%, its sixth straight loss. On Wednesday, the stock fell more than 8% below a 24.98 buy point in a cup-with-handle pattern. Qihoo’s base corrected 47% and had an awkward shape. Its handle corrected 15%, a bit more than the proper range of 8% to 12%.


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