Thursday, April 29, 2010
The major averages enjoyed their largest single day gain since February, helped by a slew of stronger-than-expected earnings and the latest multi billion dollar takover. Volume totals on Thursday were reported mixed; higher on the Nasdaq and lower on the NYSE. Advancers led decliners by about a 3-to-1 ratio on both major exchanges. Meanwhile, new 52-week highs easily trumped new 52-week lows. There were 35 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, higher than the 15 issues that appeared on the prior session. A healthy crop of new leaders making new highs bodes well for any market rally.
Earnings & M&A News Help Stocks Rally:
Stocks enjoyed healthy gains on Thursday as European woes eased and strong earnings from Motorola Inc. (MOT +3.47%) and Starwood Hotels & Resorts Worldwide Inc. (HOT +5.67%) showed the economy is improving. Motorola, the largest US mobile-phone manufacturer, gapped up after reporting an unexpected profit, and Starwood vaulted to a fresh 52-week high after releasing their latest results. Elsewhere, shares of Palm Inc. (PALM +26.13%) surged over +26% after Hewlett-Packard Co. (HPQ -0.75%) acquired the company for $1.2 billion.
Market Commentary- Confirmed Rally
It is important to note that the major averages have been steadily rallying since early February and a pullback of some sort should be expected. Tuesday marked the latest distribution day since the rally was confirmed on the March 1, 2010 follow-through day (FTD). According to the paper, there are 6 distribution days for the NYSE, 5 for the S&P 500, 4 for the Dow, and 3 for the Nasdaq in recent weeks. This puts some pressure on this 9-week rally, but has yet to cause any technical damage. The fact that the market continues to shrug off any and all negative data bodes very well for this 13-month bull market.