Now that’s more like it! Stocks fought back from an opening selloff once again on Wednesday, but this time the major indices each rose by 1% or more. We even got a new all-time high as investors look toward recovery names.
The Dow is back to making history after rising 1.35% (or about 424 points) to an all-time high of 31,961.86. Money continues to move toward recovery names with energy, financials and miners doing particularly well today. The last record close for the Dow was exactly one week ago on Wednesday, February 17.
The S&P snapped a five-day losing streak yesterday by the slimmest of margins; it gained less than five points. But the index was back with a vengeance on Wednesday by climbing 1.14% to 3925.43. It’s now in the green for the week so far
The NASDAQ managed its first positive close since last Friday by gaining 0.99% (or around 132 points) to 13,597.97. The advance recovers about a third of the losses accrued in the previous two sessions, which included a plunge of nearly 2.5% on Monday.
This index is on the other side of the rotation as money is moving out of the tech space and into stocks that will benefit most from the reopening.
The last time all three indices gained 1% or more in the same session was Thursday, February 4. Since that time though, investors have been growing more anxious about rising rates and inflation. However, Fed Chair Jerome Powell may have soothed some of those concerns in front of the House Financial Services Committee today and the Senate Banking Committee yesterday.
For the second day in a row, Mr. Powell stressed that inflation and employment are far below the Committee’s goals and will likely come up short for a while longer. Therefore, the super accommodation is here to stay for now with more stimulus likely on the way.
In other news on Wednesday, Johnson & Johnson’s (JNJ) single-dose covid vaccine was deemed safe and effective by the FDA, which means it will be another weapon in the fight to end this pandemic. Meanwhile, NVIDIA (NASDAQ:NVDA), one of the most innovative chipmakers in the market, reported strong quarterly results after the bell. But as you might expect, shares are down over 3% after hours as of this writing.
Today's Portfolio Highlights:
Counterstrike: The market’s recent sluggishness took a toll on shares of Zillow (ZG), but the stock had previously been soaring on a strong quarterly report. This popular online real estate company beat the Zacks Consensus Estimate by 41%! Jeremy considers ZG to be “one of the best stories and strongest names out there”, so he jumped at the chance to add a starter position of 4% on Wednesday before the stock moves higher again. The editor would add more on any further weakness. Meanwhile, Overstock.com (NASDAQ:OSTK) missed on the top and bottom lines in its report, which sent shares sharply lower. It’s time to get out, so Jeremy sold the e-commerce service provider today for a 13.8% return in a little over two months. Learn about all of today’s moves in the full write-up.
TAZR Trader: The correction in growth valuations will likely continue as interest rates rise and the economy re-opens, so Kevin thought this was a good time to take some profits from Baidu (NASDAQ:BIDU). This AI-focused player on Chinese big data has been a major performer for the portfolio since being added last year, and today’s trim secures a profit of approximately 112%. Read the full write-up for more on this move, along with updates on Square (SQ) and BigCommerce (BIGC).
Home Run Investor: With the chip shortage situation getting a lot more press these days, Brian thought it was a good time to cash in Ultra Clean Holdings (NASDAQ:UCTT). The company was a true home run as it brought a return of about 142% to the portfolio in five-and-a-half months. The new addition is Hillenbrand (NYSE:HI), a global diversified company with businesses in industrial equipment and funeral services. This Zacks Rank #2 (Buy) has beaten earnings expectations in each of the last four quarters with an average surprise of 46% over that time. The editor also thinks that HI has a “wonderful” valuation. Make sure to the read the full write-up for more on all of today’s moves.
All the Best,
Jim Giaquinto
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