Stocks Jump In Weak Trade; Polaris Tops 10-Week Line

By Scott Stoddard, Investor’s Business Daily

Stocks rose sharply Monday, closing at session highs, amid an increase in existing-home sales and optimism that lawmakers will reach a deal to avert the fiscal cliff.

The Nasdaq gained 2.2%. The S&P 500 charged up 2.0%, putting it back above its 200-day line. The Dow Jones industrial average rose 1.7%. Preliminary figures showed volume was down 26% on the NYSE and 20% lower on the Nasdaq compared with Friday, as the Thanksgiving holiday approaches.

The gains were broad. Polaris Industries (PII) climbed more than 1% in heavy volume as the maker of all-terrain vehicles fights to get back to its 50-day line. The stock is still 4% above a 78.04 buy point. The stock has enjoyed a strong run since its bottom in March 2009.

Home-furnishings retailer Williams Sonoma (WSM) jumped 4% in above average turnover, closing basically at its 50-day line. The stock sank below that key support line last week in strong volume after its quarterly earnings report disappointed investors.

The stock’s Accumulation-Distribution Rating has fallen from A- to B- in the past week, but still indicates moderate demand for the shares.

PetSmart (PETM) reclaimed its 50-day line after climbing 2% in above-average trade. The stock has been working on a flat base.

CommVault Systems, (CVLT), which develops software to backup, store and retrieve data, rose 3% in light trade. The stock hit a new high on Nov. 6 but then pulled back, stopping short of its 10-week line. It’s now 3% off the peak, and its Relative Strength line is at a new high.

CommVault’s Accumulation-Distribution Rating is B+ and its up-down volume ratio is above the neutral 1.0.

Paint producer Valspar (VAL), Signet Jewelers (SIG), apparel retailer Chico’s (CHS), software developer Salesforce.com (CRM) and medical device maker Medtronic (MDT) are due to report quarterly earnings Tuesday. Also on tap are food producers Hormel (HRS), H.J. Heinz (HNZ) and Campbell Soup (CPB).

On the economic front, the government is due to report housing starts and building permits for October.

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