Stocks End Modestly Higher; Sturm Ruger Hits New High

By Scott Stoddard, Investor’s Business Daily

Stocks ended modestly higher Thursday despite little signs of progress in negotiations aimed at averting the fiscal cliff.

The Nasdaq rose 0.7%, the S&P 500 gained 0.4% and the Dow Jones industrial average climbed 0.3%. Volume rose 6% on the Nasdaq and 1% on the NYSE compared with Wednesday.

The major averages rebounded after wobbling earlier in the day following comments by House Speaker John Boehner, who said little progress had been made in negotiations to soften tax hikes and spending cuts due to take effect Jan. 1. Analysts warn that failure to avoid the so-called fiscal cliff could send the economy back into a recession.

Wall Street’s gains were broad-based. Gun maker Sturm Ruger (RGR) jumped 2% in strong volume to a new high. Gun sales are rising as the holiday season approaches and fears that President Obama’s re-election will mean tighter gun control laws.

The National Shooting Sports Foundation said Monday that criminal background checks required to buy a gun hit a single-day record of 154,873 on Black Friday. That was 20% higher than the previous high, set on Black Friday last year.

Sturm Ruger has risen for eight straight sessions and is 15% past a 52.13 buy point, putting it well out of buying range.

The gun maker’s profit growth has been robust, ranging from 33% to 88% the past six quarters. Sales growth has also been strong over that period.

Cosmetics retailer Ulta Beauty (ULTA) jumped after hours following a better-than-expected earnings report for its fiscal third quarter ended in October. The stock had fallen 1% during the regular session after hitting resistance at its 50-day line.

Meanwhile, Chinese online portal Qihoo 360 Technology (QIHU) jumped more than 5% in heavy turnover. The stock had pulled back to its 10-week moving average after clearing a 24.40 buy point, but it’s since jumped off the support line and is 3% above the entry.

Soufun Holdings (SFUN), another Chinese Internet stock, climbed 3% in double its average daily volume, closing just below an all-time high. The online provider of real estate listings is thinly traded. It’s risen for six straight sessions while rebounding off its 10-week line in mostly heavy volume.

On the downside, Yum Brands (YUM), the operator of Taco Bell and KFC, sank in after-hours trading following the company’s Q3 earnings report. Profit for the quarter rose 19% from a year ago, slightly higher than expected. But the company said same-store sales in China, where it earns more than 40% of its total revenue, had weakened.

3D Systems (DDD) came off a record high, falling more than 2% in active trade. The maker of machines that produce three-dimensional prototypes mainly for the auto, medical and aerospace industries is back above a 44.90 buy point after triggering the 8% sell rule.

United Natural Foods (UNFI), a distributor of organic groceries, and apparel retailer Genesco (GCO) are scheduled to report quarterly earnings Friday.

Economic data due Friday include personal income and spending for October and the Chicago purchasing managers index for November.

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Stock Averages Start Weak, Reverse Higher

By Donald H. Gold, Investor’s Business Daily

Stocks reversed higher after a weak start Wednesday, as fiscal cliff worries turned to optimism that a deal will be worked out between President Obama and Congress.

The Dow Jones industrial average, the Nasdaq and the S&P 500 each moved up 0.8%. These broad averages were off as much as 0.9% to 1.1% at their worst.

Volume ended mixed, with totals rising on the NYSE but falling on the Nasdaq, according to preliminary data.

At a White House news conference, Obama sounded more conciliatory and eager for a deal.

“Our ultimate goal is an agreement that gets our long-term deficit under control in a way that is fair and balanced. I believe that both parties can agree on a framework that does that in the coming weeks. In fact, my hope is to get this done before Christmas,” Obama said.

Warehouse-style retailer Costco (COST) shot up 6% in 3-1/2 times its usual volume on news the company will pay a special dividend of $7 per share next month, making that distribution Dec. 18 to shareholders of record Dec. 10. The $3 billion payout beats the year-end deadline in anticipation of higher tax rates next year. This payment will be in addition to its regular 27-1/2 cent dividend.

3D Systems (DDD) shot up 7%, scoring a new 52-week high.

What had begun as a mild, low-volume climb from the 10-week moving average turned into a ferocious rebound two days ago, when the company unveiled two next-generation 3D printers. These are the latest versions of 3D’s technology, which is applied with great effect to prototyping and manufacturing.

3D is rising in the wake of a serious base failure. The stock had triggered its 44.90 buy point from an eight-week cup, failed, then regained the buy point, then failed again.

DaVita HealthCare Partners (DVA) fell 1% in more than twice its usual volume, undercutting its 50-day moving average. But the stock had sunk as much as 3% before turning around with the broad market’s improvement. The stock, No. 48 in Wednesday’s IBD 50 lineup, hadn’t closed below that key support level since early September.

Fresh Market (TFM) lost 12% in big turnover, though it had been down as much as 19%. The upscale grocery chain posted October-ended third-quarter earnings that missed forecasts, as well as a weaker-than-expected outlook. The stock had been consolidating along its 50-day moving average for about three months, but it’s now plunged below that level and its 200-day moving average.

Mellanox Technologies (MLNX) dived 10%, faltering at a test of resistance at its 10-week moving average. The Israel-based designer of chips for networking gear has been recovering since Oct. 23 after an eight-week, 43% correction.

Stock Mixed As Nasdaq Extends Win Streak, Apple Helps

By Victor Reklaitis, Investor’s Business Daily

Stocks finished mixed Monday and well off their session lows, as the Nasdaq stretched its winning streak to six straight sessions.

The Nasdaq rose 0.3% after being down as much as 0.5% intraday, leaving the tech-laden index just below its 200-day moving average. The S&P 500 lost 0.2%, while the Dow Jones industrial average shed 0.3%, after each index had been down as much as 0.8% intraday. The Dow closed back below its 200-day line and the 13,000 level.

Volume was up from Friday’s levels, but apples-to-apples comparisons aren’t possible since the market closed at 1 p.m. ET Friday.

Apple (AAPL), which accounts for 10% of the Nasdaq, moved up 3% in above-average turnover, helping to lift the tech-heavy index. It touched its best levels in nearly three weeks.

Apple is now just 1% below its 200-day line, but 5% under its 50-day line and 16% off its September high. Apple headlines on Monday were focused on the company seeking to add six more products to its patent infringement lawsuit against Samsung, along with Citi starting coverage with a buy rating.

3D Systems (DDD) surged nearly 12% in big volume. The maker of 3D printers moved back above a 44.90 cup entry after falling as much as 15% below that trigger to support near its 10-week moving average. 3D Systems is No. 1 in the latest IBD 50, but note that its recent cup base is a late-stage pattern.

On Tuesday, clothing manufacturer PVH (PVH), former leader Green Mountain Coffee Roasters (GMCR) and September IPO ADT (ADT) are among the companies slated to report quarterly earnings. The day’s economic news will include fresh figures for home prices, consumer confidence and durable goods orders.