The bad news is that rising rates put an end to the market’s recent run higher, including the Dow’s 8-session winning streak. The good news is that the reaction paled in comparison to the freak outs earlier this year, such as the pair of 1000-point single day plunges in the Dow from early February.
The index ended its run with a slide of 0.78% (or just under 200 points) to 24,706.4, though it came well off its low of the session at about 270 points. The NASDAQ was down 0.81% to 7351.6 and the S&P dipped 0.68% to 2711.5. Each of these indices spent the entire day in the red, though did come off their lows by the close.
“The market needed a pullback, so I was fine with seeing stocks selling a little bit today,” said Jeremy in Counterstrike.
The 10-year Treasury note surpassed the once-terrifying 3% mark to about 3.07%, its highest point in nearly 7 years. But this wasn’t the only factor impacting stocks on Tuesday. Home Depot (NYSE:HD) didn’t help by reporting that first-quarter sales missed expectations. Shares of the home improvement giant were down 1.6% today. Headline concerns over trade with China and the upcoming summit with North Korea also played a part.
The editors used today’s pullback to their advantage. Momentum Trader, Stocks Under $10 and TAZR Trader each picked up (or added to) positions in preparation of the market’s next leg higher. Learn all about their moves and more in the highlights section below.
Today's Portfolio Highlights:
Momentum Trader: Shares of Attunity (ATTU) broke out after a strong quarterly report, which included a positive surprise of 240%. However, this Zacks Rank #2 (Buy) cloud-based software company has since sold off a bit. Dave likes what he sees and wants to be on board for its next leg higher. Therefore, while this stock is still cheap, he added ATTU to the portfolio on Tuesday with a 12.5% allocation. Read the complete commentary for more.
TAZR Trader: Kevin thinks the market is set-up for upside surprises in the next few months, given indications of pessimism for the global economy. In fact, he sees the S&P testing 2800 in June-July. Therefore, today’s pullback presented a great opportunity to make another bullish bet. He added to the portfolio’s position in the NASDAQ 100 3X Bull ETF (TQQQ). Back in late April, the editor added a “starter” position of 5% in the name. Read more in the full write up.
Stocks Under $10: If you can be a little patient, then Iteris (ITI) might pay off in a big way for your portfolio. Brian Bolan knows how to be patient when necessary, so he picked up this provider of outdoor vision systems and sensors on Tuesday. The company recently reported a three-cent loss in its quarterly report, which actually beat the Zacks Consensus Estimate for a four-cent loss. Revenues also topped expectations and improved 14.5% from last year. ITI is a “low newsflow type stock”, which is where the need for patience comes in. But the editor thinks this stock is primed to shoot higher in the next broad market rally. The full write-up has a lot more on this new addition.
Zacks Short List: This week involves only one swap. The portfolio short-covered Williams Partners (WPZ) and replaced it by adding Teradata Corp. (NYSE:TDC). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.
All the Best,
Jim Giaquinto
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