Stock Averages Boosted By Data, But Volume Is Mixed

By DONALD H. GOLD, INVESTOR’S BUSINESS DAILY

Stocks pushed higher Thursday, propelled by solid improvement in U.S. economic data. But volume did not reflect much eagerness from big funds to plow into equities.

The Nasdaq leapt 1.4%, the S&P 500 gained 1.1% and the Dow Jones industrial average climbed 1%. Volume rose slightly on the Nasdaq but fell slightly on the NYSE, according to preliminary data.

Companies added the most number of jobs in eight months, according to data compiled by the ADP Research Institute. Some 158,000 jobs were added in October, up from a revised gain of 114,000 in September.

The Institute for Supply Management’s manufacturing index rose to 51.7 in October, up from September’s 51.5 reading and far better than expectations for a decline to 50.5. It was the index’s strongest reading since May.

The Conference Board’s Consumer Confidence Index climbed to 72.2 in October, its second-straight gain. That topped the downwardly revised 68.4 reading for September, but fell short of the 74 forecasts projected by analysts.

Construction spending rose 0.6% for September, in line with analyst forecasts and reversing two months of declines.

Catamaran (CTRX) surged 9% in double-paced trade on its Q3 report, which showed revenue more than doubled to $3.2 billion, well above analyst consensus views. Earnings rose 13% to top analyst projections by a penny. The pharmacy benefit manager raised full-year EPS guidance to the high end of analyst expectations. Catamaran completed its $4.4 billion acquisition of Catalyst Health Solutions during the quarter.

The stock has looped through a series of side-by-side consolidations since April. During that process, it undercut its initial base pattern and reset its base count. If the current consolidation forms a base, it would be a first-stage structure.

PVH Corp. (PVH), which owns Tommy Hilfiger and other clothing brands, jumped 4% to a new high in strong volume. That built on Thursday’s 20% gain following PVH’s announcement that it would pay $2.9 billion to buy Warnaco Group (WRC). Warnaco’s owned or licensed brands include Calvin Klein, Speedo and Chaps.

PVH’s relative strength line has risen sharply to a new high, and its Accumulation-Distribution Rating is B+, indicating that institutional investors find the shares attractive.

Fertilizer maker Rentech Nitrogen Partners (RNF) rose 4% in twice its average daily turnover. Rentech will acquire Agrifos Holdings for $158 million. Agrifos produces ammonium sulfate fertilizer at a plant in Pasadena, Texas.

Rentech Nitrogen, an IBD 50 stock, is just 1% off its high as it works on a possible new base. The company is expected to announce Nov. 8 that Q3 profit soared 663% from a year ago to 61 cents a share. The company has posted triple-digit profit growth in four of the past five quarters. The stock has doubled since going public at 20 a year ago.

LinkedIn (LNKD) and Priceline (PCLN) were trading sharply higher in after-hours trade after showing their quarterly reports.

On the downside, Cirrus Logic (CRUS) tanked 11% in heavy action after a downgrade to hold from strong buy, by Feltl & Co. The report gave the designer of chips for mobile devices a 44 price target, 8% above Wednesday’s closing price. The report cited a slip in the company’s growth metric, suggesting rising resistance to future growth.

The stock had been forming a possible late-stage base, but traded below 10-week support since late September.

Mortgage origination service provider Ellie Mae (ELLI) turned a 12% pre-market gain into a high-volume 6% loss. The company late Wednesday reported Q3 EPS up 289%, nearly double analyst expectations. Revenue soared 87% and also topped views.

The stock had pulled back since a mid-September high. It has been working to retake support at its 10-week line since a high volume slip on Oct. 18.

GNC Holdings (GNC) also pared its earlier panicky decline, moving from a 13% loss to just 4%. The diet, nutrition and sports supplement retailer reported third-quarter earnings up 42% to 61 cents, above consensus estimates. Revenue growth also outpaced expectations, and the company issued upside fourth-quarter and full-year earnings and sales guidance.

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