NEW YORK ( TheStreet) -- Pure-play newspaper stocks rallied sharply Monday -- turning in as strong a day as perhaps they'd seen in years -- following last week's run of quarterly reports that surprised many who had been expecting worse.

The New York Times ( NYT) was the last to report, on Thursday, coming on the heels of USA Today publisher Gannett and the community-newspaper chains McClatchy ( MNI) and Journal Communications ( JRN). All the companies managed expectations well, beating Wall Street's targets, but revenue nevertheless continued to decline, with 30% drops in advertising sales being the norm.

Of course, shares of these companies, many of them teetering on the edge of insolvency, are so beaten-down that any bidding action will prove buoyant.

Furthermore, all of the stocks had heavy short interest. The pop received from the quarterly results may have caused, therefore, a short squeeze.

As of June 25, for example, the Times had a huge short ratio of 19.2. Anything over five is considered a bearish signal. Gannett shares, by comparison, had a short ratio of 8.9, nowhere near the Times but nonetheless substantial.

Times shares led the sector higher, closing Monday's session up $1.07, up 16%, to $7.73, on volume of 2.4 million shares, nearly twice the daily average turnover.

Gannett added 72 cents, or 12.4%, to $6.52, also on heavier-than-average volume; McClatchy gained 22 cents, or 18.8%, to $1.39; EW Scripps ( SSP) rose 24 cents, or about 7%, to $3.70; and Journal Communications added 20 cents, or 9.4%, to $2.34.

On Monday, A.H. Belo ( AHC), owner of the Dallas Morning News, barely surviving, its stock now bereft any Wall Street analysts' coverage, reported a $7 million loss on revenue of $127.5 million, down from last year's loss of $3.2 million, on revenue of $163 million.

Belo shares ended Monday up 8 cents, or 4.5%, to $1.85.

--Reported by Scott Eden in New York.
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