Shares of Hertz (NYSE: HTZ) rose roughly +20% this morning after the world’s largest car rental firm agreed to acquire rival Dollar Thrifty (NYSE: DTG) for a modest premium. Investors in Dollar Thrifty can’t complain: shares are now up twenty-fold since plummeting to $2 during the economic crisis. The deal, which reduces competition, should give Hertz additional pricing power. And that’s a plus for rival Avis Budget Group (NYSE: CAR) as well, which also rose more than +10% on the buyout news.

The spike in Hertz’s shares is unusual for two reasons. First, acquirers rarely see their stocks bid up when a deal is announced, and usually suffer a modest pullback. Also, the deal is likely to only modestly improve Hertz’s profits, probably well less than the +20% increase reflected in the share price.

In this bullish market environment, even “less bad” is good. Office Depot (NYSE: ODP) continues to lose market share to rivals such as Staples (Nasdaq: SPLS), but the retailer’s annual loss is set to shrink, according to Jefferies, which is talking up the stock ahead of Tuesday’s quarterly earnings release. Shares, which rose nearly +8% on Monday, now trade at an 18-month high.

Shares of Whirlpool (NYSE: WHR) also rose more than +10% in Monday trading and now trade close to an all-time high. The appliance maker saw first quarter sales rise +20% and expects to post banner results throughout the year. Rising demand in Asia and Latin America get much of the credit, while U.S. sales are expected to grow at a more moderate pace.

But it may be time to take profits. Whirlpool now expects to earn $8 or $9 a share this year, which would top the company’s record profits of $8.10 a share earned in 2007. But investors should note that profits throughout the past decade mostly ranged from $5 to $6 a share. The current strong run rate is surely attributable to a bounce back in global demand after a period of slack in 2008 and 2009. And since this is a cyclical earnings play, investors tend to seek the exit when the price-to-earnings ratio (P/E) gets too high. Shares of Whirlpool now trade for about 13.5 times the mid-point of management’s 2009 profit guidance. Peak-cycle profits on cyclical stocks typically merit a P/E ratio below 10.

Whirlpool could go on to post solid results next year as well, and per-share profits could rise yet higher to around $10. But that still can’t justify further gains in this current highflyer.