Stocks Rise Ahead Of Key Reports

Stocks rose ahead of Thursday’s third-quarter GDP report and Friday’s unemployment data.

The Nasdaq rose 26 to 1326, the S&P 500 gained 8 to 890, and the Dow rose 58 to 8427. Volume slipped to 1.41 billion shares on the NYSE, but rose to 1.68 billion on the Nasdaq. Advancers led 20 to 11 on the NYSE, and 22 to 12 on the Nasdaq. Upside volume was 68% on the NYSE, and 85% on the Nasdaq.

After the close, EDS beat estimates and eBay reiterated guidance.

During the day, Alcatel soared 33% on better than expected results.

Microchip gained 10% on positive guidance.

Maxim gained 11% despite warning, and NetScreen rose 11% on better than expected results.

F5 fell 9% on a warning, and S1 fell 4.7% after missing estimates.

Microsoft continued to hesitate at its 200-day moving average of 53.71.

Some technical comments on the market: Note: To see the charts in the text email newsletter, click on the story link at the top of the newsletter.

The market has been holding up well, which is a plus, but the basic problem facing this rally hasn’t changed: volume and new highs must begin to expand to signal that buyers are willing to pay higher prices. So far that hasn’t happened. Nasdaq new highs have improved somewhat at 49 issues, but NYSE new highs remain stuck at 26. It is tough to sustain a rally if breakouts are sold. Critical support remains 8200 on the Dow (first chart below) and 868 on the S&P (second chart), and resistance is 8726-8762 on the Dow, and 911-924 on the S&P. The Nasdaq (third chart) faces major resistance at 1347. Support is 1300, 1280, 1250, and 1220. One positive sign for the market is the bullish “three white soldiers” candlestick pattern appearing in the Nasdaq’s weekly chart (see the arrows on the chart). A retracement to 1220 is possible, but that pattern suggests an eventual move to the Nasdaq’s August high of 1427. 1347 is a major resistance level first, however. GDP comes out tomorrow morning and unemployment numbers are reported on Friday.

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