Today's 3 Best Stocks in the S&P 500

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

Cue the solid economic news, once again, which has been a major force behind propping up the broad-based S&P 500 (SNPINDEX: ^GSPC  ) during a week when it's been clear that investors would rather take some of their profits off the table.

In addition to better-than-expected profits, primarily due to tight corporate cost controls, investors jumped on an ISM reading of 56.4 in October, which moved up modestly from a reading of 56.2 in September, and marks the fastest rate of manufacturing sector expansion since April 2011. This report also comes on the heels of yesterday's ridiculously strong Chicago PMI, which registered a 30-year high for month-over-month growth, at 65.9. These two figures would both suggest that manufacturing growth in the U.S. is stronger than economists currently project, which could mean that GDP growth will surprise everyone -- investors and analysts -- in the third, and possibly fourth, quarter.

By days end, investors digested the favorable economic news, and helped to push the S&P 500 higher by 5.10 points (0.29%) to close at 1,761.64. This also marked the S&P 500's first gain in the past three sessions.

Leading all S&P 500 components higher today was solar-panel producer First Solar (NASDAQ: FSLR  ) , which scorched higher by 17.6% after reporting its third-quarter results last night after the close. For the quarter, First Solar delivered a record $1.27 billion in revenue, a 51% increase from the previous year, in part because of its ability to land numerous large solar field projects, while net income grew an astounding 122%, to $195 million, or $1.94 in adjusted EPS. By comparison, Wall Street was expecting just $0.95 in EPS, so First Solar absolutely decimated expectations. Looking ahead, First Solar boosted its full-year EPS forecast to a range of $4.25-$4.50 from its previous guidance, which called for EPS of $3.75-$4.25. Although First Solar is clearly the name to own in the solar sector, I still have my reservations about its current valuation, with global government spending remaining generally weak.

Struggling department store J.C. Penney (NYSE: JCP  ) advanced 8.5% on the day after receiving rare (at least rare these days!) positive commentary from ITG Investment Research. ITG notes that improving sales trends over five of the past seven weeks leads it to believe that comparable-store sales will be down just 4%, compared to the research firm's own previous expectations of a 6% decline in comparable-store sales in the upcoming quarter. These positive comments also follow CEO Mike Ullman noting recently that he anticipates Penney's comparable-store sales turning positive coming out of the third quarter. I'm certainly pleased to see sales stabilizing, as that's the first step for Penney if it hopes to successfully engineer a turnaround. But let's also be realistic; this turnaround is still years in the making, and the stock probably doesn't deserve much of a pop based on today's positive commentary.

Finally, iron ore and coal miner Cliffs Natural Resources (NYSE: CLF  ) jumped 6.5% despite no company-specific news today. Earlier this week, though, Cliffs had its full-year EPS estimates boosted higher by Nomura after the company reported market-topping third-quarter results. In that quarter, Cliffs Natural reported a 17% increase in iron ore pricing -- the lion's share of Cliffs' business is iron ore mining, not metallurgical coal production -- while costs fell 11% from the year-ago period. All told, with China getting its economy back on track, and short-sellers now on the run, Cliffs Natural's next milestone could be reclaiming the $30/share mark fairly soon.

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