SPECIAL NOTE: We've just released this quarter's Ultimate Four report which includes four stocks our team believes have the greatest upside potential over the upcoming quarter. This latest report features favorite stocks from Eric Dutram, David Bartosiak, Tracey Ryniec and Kevin Cook. See these stocks today.
Heading into today’s session, the Dow had gained in 12 of the past 15 sessions. So the index didn’t need IBM (NYSE:IBM) to report a fantastic quarter in order to close above 23,000…though it sure does help. Sometimes the market is hesitant to take out those “psychologically important” levels, but this time the Dow soared past the milestone by more than 150 points.
The index jumped 0.70% (or 160 points) to 23,157.6 today. Meanwhile, the S&P was up 0.07% to 2561.3 and the NASDAQ inched higher by 0.01% to 6624.2. This marks another day with all three indices at record closes.
As for IBM, the company beat earnings and revenue expectations for the third quarter. The big surprise, though, came in the nearly 8.9% surge in stock following the report. It’s not every day that an established large-cap like “Big Blue” has that kind of a reaction to quarterly numbers, especially since the company has a great history of outperforming. With the strong surge in IBM and the overall upward trend in the market, the Dow had an easy time making history on Wednesday.
Today's Portfolio Highlights:
Home Run Investor: Brian Bolan has a personal, first-hand reason for liking Floor and Décor (FND). The editor remodeled his bathroom this summer and was very disappointed with the specialty retailer he chose. In hindsight, he should have gone with FND…and now he can (in a way). FND is a Zacks Rank #2 (Buy) that only has two earnings reports since going public, but that includes two better-than-expected top line results along with an earnings beat and an earnings meet. The Zacks Consensus Estimate has been trending higher for months, while the strong housing market backs up this play. Read the full write-up for a lot more on this new addition.
Counterstrike: "Unsurprisingly, stocks went to new highs, once again on low volume trading. This time the bulls rode the back of the Dow, which saw solid earnings from IBM. The S&P and Nasdaq were basically flat, but the Dow added 159 points to close above 23,000 for the first time.
"Overall, the rally was purely Dow related, as IBM and GS both helped push the price weighted index higher. Typically, you would like to see everything going higher at the same time to really get bullish, but that’s just not how this market operates. Instead of an explosion higher we continue to see a slow and steady grind higher.
"This is shaping up to be a really quiet week and I expect more of the same low volume trading into the weekend. I think the S&P might breakout over the next two days, but there seems to be some serious resistance around 2565. If we can get above that level and hold, 2600 is likely before the holidays." -- Jeremy Mullin
Momentum Trader: "What’s happening in this market right now is almost surreal. I’m not one to look a gift horse in the mouth so I’m just going to go with the flow. I’m already a “Buy high, sell higher” kind-of-guy so this fits the narrative. I’m just surprise that it’s the large caps of the Dow that are leading the way higher each day.
"Yesterday was the first day the Dow hit 23,000 ever, today was the first close above the landmark number. I don’t think this market is done yet. Bulls have taken over early in this earnings season and if this tax deal can find a way to get done I believe we will be off the races." -- Dave Bartosiak
Have a Good Evening,
Jim Giaquinto
Recommendations from Zacks' Private Portfolios:
Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>
Zacks Investment Research