Stocks Rise As Fiscal Cliff Talks Raise Hopes

By Donald H. Gold, Investor’s Business Daily

Stocks ended with modest gains Friday, as a fiscal meeting between the president and legislators ended amid hopes for progress.

The Nasdaq rose 0.6%. The S&P 500 added 0.5%. The Dow Jones industrial average, weighed by Dell’s big loss, rose just 0.4%. Volume increased smartly on both major exchanges.

With all eyes on the fiscal cliff negotiations, the market seemed relieved when the first meeting between President Obama and leaders of the House and Senate ended in an atmosphere of constructive progress. House Speaker John Boehner’s outline indeed includes new revenue for the government. Still, Republicans likely won’t sign off on a deal that doesn’t address spending. The meeting produced no results, but no acrimonious tirades, either.

On the economic front, industrial production slowed 0.4% in October, the Fed reported, down from a downwardly revised 0.2% expansion in September. The Fed estimated Superstorm Sandy to have reduced the rate of change by nearly a full percentage point.

Sirona Dental Systems (SIRO) jumped 8% to a new high after delivering positive fiscal fourth-quarter results. Adjusted earnings inched up 4% to 71 cents a share, ahead of views for a 3% gain. Revenue rose 13% to $247.4 million, well above forecasts for $224.8 million.

The company announced that Chairman and Chief Executive Jost Fischer would step down, effective Feb. 20. Company President Jeffrey Slovin will assume the CEO role. Board member Thomas Jetter was named Sirona’s nonexecutive chairman.

Regeneron Pharmaceuticals (REGN) surged 11%, helped by news that its cancer drug, Zaltrap, has won European Union approval. Regeneron and French drugmaker Sanofi (SNY) share profits from Zaltrap. Regeneron, which sports a 97 Composite Rating, has rocketed back above its 50-day line.

Apple (AAPL), which has been on a slide for two months, staged an upside reversal, turning a 4% loss into a fractional gain in fast trade. The stock still remains 25% off its September high.

Dell (DELL) slumped 8% in heavy trade. The computer maker reported late Thursday that its Q3 earnings slipped 28% to 39 cents per share, missing consensus views by a penny. Sales dipped 11% to $13.7 billion, also below expectations. The stock has been correcting since February and is at a new 52-week low.

Ruckus Wireless (RKUS) fell 18% from its $15 issuing price on its NYSE debut Friday. IBD has long advised that investors wait at least a few weeks until a new issue sketches its first consolidation before considering buying shares. Some IPOs have been postponed this month, but the networking equipment maker went ahead, as IBD noted in a recent article.

Hibbett Sports (HIBB) fell 3% in big volume after its third-quarter report. The sporting goods retailer lifted Q3 EPS 20% to 71 cents, beating forecasts, but revenue just matched estimates as it grew 10% to $203 million. Hibbett’s full-year EPS target was roughly in line with expectations. The stock stands below its 50-day and 200-day moving averages, and it has been moving sideways since May. Its IBD Composite Rating is 82 out of a best-possible 99.


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