The market’s three-day winning streak ended on Tuesday with a late-session selloff, but stocks still held onto most of yesterday’s robust gains.
The Dow slipped 1.59% (or about 390 points) to 24,206.86, while the S&P (NYSE:SPY) declined 1.05% to 2922.94. These indices advanced 3.85% and 3.15%, respectively, in Monday’s rally.
The NASDAQ was back to outperforming its counterparts and looked like it would rise for a fourth straight session. However, the late selloff pulled the index lower by 0.54% (or nearly 50 points) to 9185.10. The index was up 2.4% yesterday.
A pullback on Tuesday after the impressive start to the week isn’t surprising, but the late decline had some help from a STAT News article that questioned yesterday’s Moderna (NASDAQ:MRNA) data that sparked the rally. Basically, the piece says that there’s not enough data yet to justify the recent enthusiasm.
Shares of MRNA dropped 10.4% on Tuesday, which gave back approximately half of yesterday’s surge.
Stocks weren’t very energetic, though, even before the article came out. The beaten down stocks that moved higher yesterday were under pressure again on Tuesday, including bank shares.
And investors weren’t too excited about first quarter reports from retail giants Wal-mart (WMT) and Home Depot (NYSE:HD), even though both companies reported increases in revenue and same-store sales. They will be spending a lot of money on the coronavirus, while HD had a stiff decline in profit.
Shares of HD were down nearly 3% today, while WMT was off 2.12%.
The retail reports just keep on coming this week with Lowes (LOW) and Target (NYSE:TGT) going to the plate tomorrow, while Best Buy (BBY) reports on Thursday.
Today's Portfolio Highlights:
Zacks Short List: This week's adjustment included four swaps. The stocks that were short-covered included:
• Las Vegas Sands (NYSE:LVS)
• Royal Caribbean Cruises (NYSE:RCL)
• Darden Restaurants (NYSE:DRI)
• GDS Holdings (NASDAQ:GDS)
The new buys that filled these open positions were:
• Ceridian HCM Holding (NYSE:CDAY)
• IAC/InterActiveCorp (NASDAQ:IAC)
• Ryman Hospitality (NYSE:RHP)
• V.F. Corp. (VFC)
Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.
Surprise Trader: "Here at Surprise Trader we know a good old-fashioned rope-a-dope when we see one. That’s part of the frustration, and opportunity, of earnings. Everything can go right in the report and the stock will still get beat down. Leaving plenty of head-scratching in its wake. Sure feels like the scenario here with Walmart (NYSE:WMT). The company beat on both top and bottom line. Same-store-sales were up over 10% and online sales 74%.
"Yet, the stock sold off all day. After briefly popping up to $131.99 shortly after the open, Walmart shares finished down on the day at $124.95, off a little more than 2%. It was down all day too, even as the broad market was in the green. It just goes to show that sometimes, there is a large player moving shares and you are completely helpless against them. I think WMT was a buy into the bell here." -- Dave Bartosiak
Until Tomorrow,
Jim Giaquinto
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