Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Dow Gains Over 200 Points to Begin May

By Zacks Investment ResearchStock MarketsMay 03, 2021 09:15PM ET
www.investing.com/analysis/dow-gains-over-200-points-to-begin-may-200577254
Dow Gains Over 200 Points to Begin May
By Zacks Investment Research   |  May 03, 2021 09:15PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Recovery stocks had a strong start to the new month (and week) on Monday, sending the Dow higher by more than 200 points as investors remain encouraged by a solid earnings season and a rapid pace of vaccinations. They’re also feeling pretty good about Friday’s all-important jobs report.

The Dow enjoyed the best performance of the day by advancing 0.70% (or nearly 240 points) to 34,113.23. The S&P rose 0.27% to 4192.66, but the NASDAQ slipped 0.48% (or about 67 points) to 13,895.12.

Stocks are coming off a very impressive April that saw the S&P and NASDAQ each advance by more than 5%. The Dow was up 2.7%. We enjoyed strong earnings, solid economic data and a Fed that constantly reiterated its super dovishness throughout the month.

We’re also returning from a week dominated by Big Tech earnings reports, especially Alphabet (NASDAQ:GOOGL) (GOOG), Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), Facebook (FB) and Amazon (NASDAQ:AMZN). These tech giants all beat on both the top and bottom lines in their quarterly reports. And yet, the market was still disappointed with the results, which is what happens when you’re looking for perfection. The FAANGs + MSFT were down again on Monday, except for AAPL. The iPhone maker managed to gain 0.82%.

Speaking of earnings season, we’re still in the thick of it! Those tech names may take up most of the oxygen in the room, but there are still over 1,000 names going to the plate this week. Some of tomorrow’s big reports come from Pfizer (NYSE:PFE), CVS (CVS), ConocoPhillips (NYSE:COP) and Activision Blizzard (NASDAQ:ATVI).

But the biggest story of the week will likely be Friday’s Government Employment Situation. As you no doubt remember, last month’s report (which was released on Good Friday when the market was closed) was nothing short of epic. The economy added over 900K jobs, which was 250K better than expectations and doubled the previous month.

And the market is expecting nearly 1 million more in this report as well!

Today's Portfolio Highlights:

Technology Innovators: After selling three names last Friday (including cashing in a more than 50% winner), Brian thought it was time to “fill in some of the holes”. On Monday, he added Smart Global (SGH), a designer, manufacturer and supplier of electronic subsystems to OEMs. The company has beaten the Zacks Consensus Estimate in each of the past four quarters with an average surprise of 7.1%. Rising earnings estimates have made SGH a Zacks Rank #1 (Strong Buy), while the editor “loves” the valuation here with solid growth being presented as well. Shares of SGH were as high as $55 not too long ago, so it has a lot of ground to recover. Read the full write up for more specifics on this new addition.

Counterstrike: The casinos will be among the biggest beneficiaries of the economy’s grand re-opening, which was clearly on display in the quarterly report from Boyd Gaming (NYSE:BYD). This Zacks Rank #1 (Strong Buy) operates a multi-jurisdictional gaming company with properties in as many as 10 states, including Nevada, Illinois, Missouri, Ohio and Pennsylvania. The company beat the Zacks Consensus Estimate by 111% in its recent report, but still slipped about $10 afterwards like so many other strong performances this earnings season. But that's all right since it opens a fantastic opportunity for Jeremy. He added BYD on Monday with a 6% allocation, while also selling eBay (NASDAQ:EBAY) for a 9.4% return in two months and Rocket Companies (RKT) for a loss.

Surprise Trader: The past two quarters saw Gildan Activewear (NYSE:GIL) beat the Zacks Consensus Estimate by triple digits! And now it has an Earnings ESP of 7.69% for the quarter coming after the bell on Wednesday. There’s no way of telling if GIL is set for another outsized surprise, but it does seem poised for a third straight beat. Dave added this Zacks Rank #2 (Buy) on Monday with a 12.5% allocation, while also selling Potlatch (PCH) for a slight 0.6% increase in less than two weeks. Read the complete commentary for more on today’s action.

Blockchain Innovators: The dry bulk shipping stocks had a strong session on Monday, which helped Danaos (NYSE:DAC) become the best-performing stock on the day among all ZU names. Shares jumped 13.5% today and it’s now up approximately 130% in the service since being added in early January. DAC is a leading international owner of containerships and chartering vessels to many of the world’s largest liner companies. The company reports again in two weeks and will be going for a 15th straight positive surprise.

Black Box Trader: Half of the portfolio was replaced in this week's adjustment, which included a double-digit winner and a couple other positive returns. The stocks that were sold on Monday included:

• Deutsche Bank (DE:DBKGn) (DB, +13.3%)
• Toll Brothers (NYSE:TOL, +5.7%)
• ConocoPhillips (COP, +1.8%)
• CNH Industrial (NYSE:CNHI)
US Steel (X)

The new buys that filled these open spots were:

• Dow (DOW)
• Graphic Packaging (NYSE:GPK)
• KBR (NYSE:KBR)
• Nucor (NYSE:NUE)
• Olin Corp. (NYSE:OLN)

Read the Black Box Trader’s Guide to learn more about this computer-driven service.

Headline Trader: "In the past 9 years, the S&P 500 has illustrated an average return of 5.3% over this once quiet summer period (May through October). These six months of summer might have been a market vacation in the past, but this new market doesn't take any holidays, and selling in May is no longer a rewarding strategy.

"That being said, I believe that an enormous amount of optimism has been priced into the markets, but as an investor, there is really no other place to put your money to work today. From real estate to commodities to cryptocurrencies, every other asset class is sitting at very expensive levels. Investors don't want to be holding fixed-income assets in an environment where interest rates are poised to keep rising. Obviously, cash is not attractive to be holding, with inflation already showing signs of soaring.

"The stock market remains the most attractive place to put your money to work, despite its seemingly frothy levels."
-- Dan Laboe

Until Tomorrow,
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
Dow Gains Over 200 Points to Begin May
 

Related Articles

Dow Gains Over 200 Points to Begin May

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email