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Small Caps Pop, While Nasdaq Fizzles; Morgan Stanley Up

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U.S. stock indexes struggled Monday, showing hesitation for the third session in a row.

The Nasdaq trimmed 0.4%, while the S&P 500 was flat. The blue chip Dow Jones industrial average tacked on a 0.1% gain. The small cap Russell 2000 led with a 1% pop. Volume in the stock market today was running modestly higher on both major exchanges, according to preliminary data.

After the small cap S&P 600 logged a tone-changing gain of 3.1% Wednesday, the small cap index remains one of the few with strong follow-up action. The Nasdaq and S&P 500 haven't moved much in the past three sessions.

If the uptrend is to avoid rolling over, the major indexes are going to have to get with it.

Banks have been one of the market's stronger sectors. Eight banks have nailed down spots in the IBD 50, a list of the best stocks in fundamentals and technicals. On Monday, all eight rose, but three reversed lower in the day's range. Western Alliance Bancorp (WAL) erased most of a 5% gain. Home BancShares (HOMB) rubbed out most of a 4% gain. Chemical Financial (CHFC) also gave back most of a 4% advance.

Morgan Stanley (MS) did a bit better, holding onto about 2% of a midmorning 3.6% gain. Morgan Stanley cleared a 32.47 buy point intraday in September. The stock sketched a handle with a 34.13 buy point and broke out on the Nov. 9 follow-through day. Shares are 15% extended.

In the Dow, losers led winners by a 2-to-1 ratio. McDonald's (MCD) was the biggest gainer, up 3% in brisk volume. The stock recently reclaimed its 50-day moving average but remains under the 200-day line.

The biggest loser in the Dow was Visa (V), down 4% in twice its usual volume. Visa was trying to retake its 50-day line but dropped to its 200-day line, where it appeared to find support.

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