Dow Takes a Break as We Prepare to End Month, Quarter

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The Dow may have pulled back from all-time highs in this next-to-last session of March 2021, but the index is still poised for solid monthly gains. The S&P is also on target for a positive performance despite all the concerns of rising bond yields in recent weeks.

The margin call mania of the previous two sessions seems to have waned, as several stocks that got caught up in the Archegos drama bounced back during the day. For example, Baidu (NASDAQ:BIDU) rose 6.6%, while Discovery (NASDAQ:DISCA) was up 5.4% and ViacomCBS (NASDAQ:VIAC) advanced 3.5%.

However, concerns over rising rates remain on the minds of investors. So the market was less-than-thrilled to see the 10-year Treasury yield jump to 1.77% at its high. It calmed down by the close and finished just slightly above 1.7%, but this was the second straight session above that mark after remaining below it all of last week.

The market’s reaction was not too severe though. The Dow slipped 0.31% (or about 104 points) to 33,066.96, which ends back-to-back sessions of new closing highs. Meanwhile, the S&P was off 0.32% to 3958.55 and the NASDAQ dipped 0.11% (or a little more than 14 points) to 13,045.39.

The Dow is heading into the final session of March with an impressive gain of 6.9% for the month amid optimism of the grand re-opening. The S&P is up 3.9% for the month so far.

Unsurprisingly, the NASDAQ is in the red for March by about 1.1%, which doesn’t seem too bad when you consider all the money that has fled tech over the past several weeks.

Don’t forget that tomorrow is not only the end of the month, but also the end of the quarter. So be prepared for some craziness. Further details on the Biden Administration’s infrastructure plan could also have an impact.

Today's Portfolio Highlights:

Large-Cap Trader: The portfolio cashed in THREE double-digit profits in today’s adjustment. John sold WestRock Co. (NYSE:WRK) for nearly 22% in three months, while also getting out of Louisiana-Pacific Corp. (NYSE:LPX) and McKesson (NYSE:MCK) for approximately 14.6% each in less than a month. The proceeds were spread out equally into these three buys:

• Synnex (SNX) – a business process outsourcing company
• Panasonic (OTC:PCRFY) – a worldwide leader in electronic products
• Evercore (EVR) – an investment banking company

EVR is a Zacks Rank #1 (Strong Buy), while the other two are Zacks Rank #2s (Buys). In addition to the strong Zacks Ranks, these stocks are also in highly-ranked industries; beat expectations by double-digits in their most recent quarterly reports; and have reasonable valuations. John thinks they will do well in the current environment. Read the full write-up for a lot more on today’s moves.

Blockchain Innovators: The healthcare industry offers exciting potential for blockchain. The technology is used to keep medical records confidential, but also share patient data across broad networks when necessary. And you can just imagine how much help blockchain can be in streamlining medical billing. On Tuesday, Dave added iCAD (NASDAQ:ICAD), which has a product called iCAD Profound AI that provides an advanced, deep-learning cancer detection software solution. Revenue and earnings growth for this year are expected at 32.75% and 55.81%, respectively. And next year looks to be even better! A recent pullback gave the editor a great opportunity to pick up this innovative name. Read the full write-up for a lot more on today’s addition. In other news, this portfolio had a top performer today as Rekor Systems (NASDAQ:REKR) rose 9.1%.

TAZR Trader: Last Friday’s margin calls sure did unnerve the market and took a big toll on some of Kevin’s favorite stocks. However, it looks like the selling is already exhausted and fears of a hedge fund massacre are waning. What’s left is a great opportunity to add more to the portfolio’s innovative names. Therefore, the editor bought more of payment processor Square (SQ) on Tuesday. Read the full write-up for more on Kevin’s views of the recent volatility, and how you can take advantage.

Surprise Trader: We’re in between earnings seasons at the moment, so it’s the quiet time for this portfolio. But Dave is still at work at making moves when he can. And today he did! On Tuesday, the service added Acuity (AYI), a Zacks Rank #2 (Buy) lighting fixtures maker. The company will be going for its fourth straight quarterly surprise when it reports before the bell tomorrow, March 31. It beat by more than 11.5% last time and has an Earnings ESP of 7.14% for the upcoming report. The editor added AYI today with a 12.5% allocation and sold the disappointing Evolus (NASDAQ:EOLS) position. Get more specifics on today’s action in the full write-up.

Zacks Short Sell List: This week’s adjustment included only one change... but the portfolio cashed in a double-digit return! The service short-covered Illumina (NASDAQ:ILMN) for approximately 14% in less than two months, and then filled that open spot by adding Autodesk (NASDAQ:ADSK). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short Sell List Trader Guide.

All the Best,
Jim Giaquinto