Stocks plunged in the final hour of trading on Thursday, ending two straight days of substantial gains. However, the market remains solidly higher for the week heading into Friday’s session.
The S&P (NYSE:SPY) snapped a three-day winning streak and declined by 0.21% to 3,029.73, while the Dow slipped 0.58% (or about 147 points) to 25,400.64.
Despite losing their morning rally, these indices remained well above milestones that were reached yesterday.
The NASDAQ also had a three-day winning run come to an end with a decline of 0.46% (or about 43 points) to 9368.99.
Well, the Dow can’t soar over 500 points every day, as it did on Tuesday and Wednesday. Stocks were due for a rest, and the rising tensions with China provided the opportunity.
President Trump will be holding a news conference on China tomorrow, which was the main reason that the rally ran out of gas in the final hour.
Just yesterday, the House passed sanctions for human rights violations against China and the State Department said that Hong Kong could no longer be viewed as autonomous after the recent security law.
Earlier in the session, the market had, once again, shrugged off a rough jobless claims report. Approximately 2.1 million people filed for unemployment last week, which was inline with expectations and brought the number of jobs lost since the shutdown to over 40 million.
However, the pace of new claims is declining and will, hopefully, continue to do so now that all 50 states are slowly beginning to re-open from the shutdown.
Fortunately, Thursday’s losses didn’t make much of a dent in the advances from the previous two sessions. All three indices go into Friday with gains for the week, including the Dow being up by 3.8% and the S&P higher by 2.5%.
Stocks look well on their way to a second straight week in the green, though the extent of those advances may depend on the President's comments tomorrow.
Today's Portfolio Highlights:
Value Investor: This is a tough time for value investors, but Tracey still found a couple of names worth adding to the portfolio. On Thursday, the editor picked up Graphic Packaging (NYSE:GPK) and Pinterest (NYSE:PINS). GPK is a Zacks Rank #2 (Buy) that makes packaging for food. It has all the classic value fundamentals and is expected to grow earnings by 10.3% this year and another 7.4% next year. PINS is a Zacks Rank #2 (Buy) that’s returning to the portfolio because it’s the most undervalued name in the social media space. Tracey likes buying companies that are being ignored… and that’s PINS! Read the complete commentary for a lot more on these new buys. This service also had one of the best performers of the day among all ZU names as InMode (NASDAQ:INMD) advanced 7.4%.
Large-Cap Trader: The portfolio cashed in a couple double-digit winners on Thursday in a busy session that included three swaps in all. The stocks that left the portfolio include Neurocrine (NASDAQ:NBIX) Biosciences (NBIX, +19.1% in 5 months), Adobe (NASDAQ:ADBE) (ADBE, +10.7% in 1 month) and Advantest (ATEYY, +0.5% in 1 month). And the new buys that filled these spots were:
• Northern Trust Corp. (NASDAQ:NTRS) – a financial company that John sees as a play on the country’s re-opening
• Akamai Technologies (NASDAQ:AKAM) – an ‘apples to apples’ replacement for ADBE that the editor considers a safe play with rising earnings estimates for this year and next
• Tencent Holdings Ltd. (OTC:TCEHY) – an Internet service portal that’s a ‘better Asia play’ than ATEYY for obvious reasons. It’s a Zacks Rank #1 (Strong Buy) with high Zacks Style Scores and Zacks Industry Rank (Top 13%).
John suggests taking today’s profits and spreading it equally across these three picks. Read the full write-up for more specifics on all of these moves. By the way, this portfolio's Alexion Pharma (NASDAQ:ALXN) position was among the top movers of the day with a gain of 7.8%.
Surprise Trader: The portfolio added another retail name on Thursday since this space has been performing well despite reporting challenging quarters during the pandemic. Dave picked up Guess (NYSE:GES) on Thursday, a Zacks Rank #2 (Buy) that should be reporting within the next week or two. The apparel company has a positive Earnings ESP of 12.75% for the quarter and a lot of ground to recover to get back to highs of more than $22 earlier this year. The editor added GES with a 12.5% allocation and also sold Plantronics (NYSE:PLT). See the full write-up for more.
Technology Innovators: Since falling short of earnings estimates in its most recent report, Radware (NASDAQ:RDWR) has slipped to a Zacks Rank #3 (Hold). Brian sold this cyber security name on Thursday for a 9.7% return in just a little under two months. The new buy is Pluralsight (NASDAQ:PS), a Zacks Rank #1 (Strong Buy) enterprise technology learning platform. The editor sees this as a “critical component” in the workplace shift from the office to home. The complete commentary has a lot more on this new buy.
Counterstrike: With the bulls firmly in control of the market right now, Jeremy kept his promise of a new addition on Thursday. Actually, he added two and sold one. National Beverage Company (NASDAQ:FIZZ) was the deletion as this maker of LaCroix and Shasta hit the service’s targets. The editor decided to be prudent and take the 16.2% return in just a little over a month.
The new buys are The Trade Desk (NASDAQ:TTD) and United Natural Foods (NYSE:UNFI). Both of these stocks spiked higher recently after strong quarterly reports, but have since pulled back. TTD is a Zacks Rank #2 (Buy) that was added with a 7% allocation, while UNFI is a Zacks Rank #1 (Strong Buy) with a 5% allocation. Learn a lot more about these moves in the complete commentary, including a look at their charts.
TAZR Trader: The plan was to wait for earnings estimates in Proofpoint (NASDAQ:PFPT) to go down before adding this cybersecurity play. But they just keep going up, even after warning about enterprise sales channel issues in its most recent report. Kevin doesn’t want to wait any longer, so he added PFPT on Thursday with a 10% allocation. He’s still getting in at a good price for a stock that could be moving to new highs above $130. The editor also sold ProShares UltraPro Short Dow30 (SDOW). Read the full write-up for more, including what institutional analysts are saying about PFPT.
All the Best,
Jim Giaquinto
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