US STOCKS-Wall St up on M&A, earnings; technicals positive

* Adobe Systems forecast tops expectations

* Massey Energy jumps after acquisition report

* Technical signals paint optimistic picture

* Indexes up: Dow 0.4 pct, S&P 0.5 pct, Nasdaq 0.6 pct

* For up-to-the-minute market news see [STXNEWS/US]
(Updates to midday)

By Chuck Mikolajczak

NEW YORK, Dec 21 (BestGrowthStock) – U.S. stocks (Read more about the stock market today. ) advanced on
Tuesday as solid earnings and a flurry of merger action laid
the foundation for a steady upward trend in the equities market
that investors potentially see accelerating.

U.S. stock indexes hit new highs after topping key
technical resistance levels. The S&P 500 has rallied more than
6 percent to two-year highs this month and was up around 22.6
percent from closing lows this year.

Analysts said equity markets were also got a boost as fund
managers reallocated cash to equities from fixed income and
reduced cash positions on expectations of an improving

“Your alternative is to make nothing in cash, lose money in
treasuries or make another 15 percent in stocks. So what are
you going to do?” said Phil Orlando, chief equity market
strategist, at Federated Investors in New York.

“Investors are going through that same calculus right now
and saying I’m underallocated to stocks.”

The Dow Jones industrial average (.DJI: ) gained 48.33
points, or 0.42 percent, to 11,526.46. The Standard & Poor’s
500 Index (.SPX: ) rose 6.50 points, or 0.52 percent, to
1,253.58. The Nasdaq Composite Index (.IXIC: ) advanced 15.56
points, or 0.59 percent, to 2,665.12.

Adobe Systems Inc (ADBE.O: ) jumped 4.7 percent to $30.56 a
day after after an upbeat forecast in contrast with a
pessimistic outlook three months ago. For details, see

Adding to the positive tone, American International Group
Inc (AIG.N: ) gained 2.5 percent to $54.74 after officials
briefed on the situation told Reuters the U.S. government plans
to sell a large piece of its stake in the company.

U.S. coal miner Massey Energy Co (MEE.N: ) rose 1.2 percent
to $52.48 after the Wall Street Journal reported rival Alpha
Natural Resources Inc (ANR.N: ) offered to buy it. Alpha climbed
3 percent to $55.23. [ID:nSGE6BK03Z]

Further supporting rising stock indexes were recent
technical signals indicating the march upward could continue.

The S&P 500, which has gained in each of the last three
weeks, broke through the 61.8 percent Fibonacci retracement of
the 2007-2009 bear market slide earlier this month.

Technicians say the next stop is the 76.4 percent
retracement at 1,362.

John Brady, senior vice president at MF Global in Chicago,
expects the market to move either slowly sideways or higher as
S&P 500 works off an overbought condition shown in the
seven-day and nine-day Relative Strength Index (RSI).

“It’s a grind trade higher on not a whole lot of volume,”
he said. “A trade between 1,250 and 1,230 (in the S&P 500)
seems really well contained, and any profit-taking will
probably be modest.”

The RSI provides a measure of higher closes to lower closes
over a given trading period and is closely watched by traders.

In other individual movers, Martek Biosciences Corp
(MATK.O: ) surged 35.2 percent to $31.59 after Dutch group DSM
(DSMN.AS: ), the world’s largest vitamins maker, agreed to buy
the maker of U.S. baby food ingredients. [ID:nLDE6BK04U]

Jabil Circuit Inc (JBL.N: ), the electronics manufacturer,
advanced 10 percent to $19.38 a day after it reported
better-than-expected quarterly profit and forecast a robust
second quarter. [ID:nSGE6BJ0CV]
(Additional reporting by Edward Krudy; editing by Padraic
Cassidy and Jeffrey Benkoe)

US STOCKS-Wall St up on M&A, earnings; technicals positive