NASDAQ Jumps Over 1% as Tech Sparks Late Rally

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The tech giants resumed their leadership position on Monday, sparking a last-hour rally in the major indices that snapped two straight days of losses.

The NASDAQ left its counterparts in the dust by soaring 1.23% (or about 105 points) to 8710.71. It’s now down just 3% for the year.

The index was actually the biggest loser on Friday, as the market was not thrilled by quarterly reports from tech leaders Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL).

However, each of those stocks rose by more than 1% to start this week. And several other of tech’s most important names also ended on positive ground, especially Netflix (NASDAQ:NFLX, +3.1%) and Microsoft (NASDAQ:MSFT, +2.45%).

The NASDAQ spent most of the day in the green, but the other indices were more dramatic and staged a late rally to give the market its first positive session since last Wednesday’s surge.

The S&P (NYSE:SPY) rose 0.42% to 2842.74, while the Dow recovered from a more than 350-point pullback to finish higher by 0.11% (or about 26 points) to 23,749.76.

Stocks had a rough start to the session after Warren Buffett dropped all his stakes in the airlines over the weekend. Plus, investors remain concerned that the U.S. may hold China accountable for the coronavirus through another round of tariffs or other economic measures.

But the market eventually turned things around and showed the impressive resilience we saw throughout the awesome month of April.

Looking toward the rest of the week, it’s another busy time for earnings. Perhaps the biggest report comes from Disney (DIS) tomorrow, especially since the media and entertainment giant was recently downgraded by a research firm.

Other important or interesting reports in the next few days include Lyft (NASDAQ:LYFT), GrubHub (NYSE:GRUB) and Square (NYSE:SQ) on Wednesday, as well as Uber (NYSE:UBER), Bristol-Myers Squibb (NYSE:BMY) and Hilton (HLT) on Thursday.

We’ll also be paying close attention to any news or updates on the handful of states that are beginning to reopen. After the bell today, even California stated that it would slowly begin the next phase in its reopening plan by the end of the week.

Today's Portfolio Highlights:

Surprise Trader: The Internet – Software space is in the Top 13% of the Zacks Industry Rank, so that’s where Dave went to start this week. The editor added Benefitfocus (NASDAQ:BNFT), a Zacks Rank #2 (Buy) provider of cloud-based software solutions to consumers, employers, insurance carriers and brokers. Over the past 10 quarters, this stock has beaten 8 times, matched once and missed only once. Most recently, it surprised by 200%. Now it has an Earnings ESP of 14.73% for the quarter being reported on Wednesday after the bell. BNFT, which also enjoys a Zacks VGM Score of ‘A’, was added on Monday with a 12.5% allocation. The portfolio sold Harmonic (NASDAQ:HLIT) today, as well. Read the complete commentary for more.

Counterstrike: This ‘market neutral’ environment means Jeremy needs to play on both the long and short side. Last week, he made a few defensive moves that really paid off as stocks dropped on Friday. Now he wants to add a few longs to start this week. The following three names all saw some pullback recently but should be moving higher in the weeks ahead:

• Zynex (NASDAQ:ZYXI), a Zacks Rank #1 (Strong Buy) medical devices company that maintained its 2020 guidance and forecasted Q2 above expectations

• Domino’s Pizza (DPZ), a Zacks Rank #2 (Buy) that’s “feeding America through the lockdowns” and beat by 34% recently

• Spotify (NYSE:SPOT), a Zacks Rank #2 (Buy) provider of music streaming services that sold off into an attractive area despite a 48% beat

Each of these stocks were added with 5% allocations. Read the full write-up for a lot more on these picks.

Black Box (NYSE:BOX) Trader: This week's adjustment included only two swaps, but both of the sold positions were positive and one was a double-digit winner. The stocks that left the portfolio today included Virtu Financial (NASDAQ:VIRT, +16.3%) and The Clorox Co. (NYSE:CLX, +7.5%). The new buys that filled these spots were CNX Resources (NYSE:CNX) and Yum China Holdings (NYSE:YUMC). Read the Black Box Trader’s Guide to learn more about this computer-driven service designed to take the emotion out of investing. By the way, this portfolio had the best performer of the day among all ZU services as Scorpio Tankers (NYSE:STNG) jumped 12.8%.

Healthcare Innovators: Most of the Top 5 performers on Monday came from this portfolio, including the second biggest winner among all ZU services in Editas Medicine (NASDAQ:EDIT, +12.3%). The other movers included Intellia Therapeutics (NASDAQ:NTLA, +10.1%) and bluebird bio (BLUE, +9.7%).

Until Tomorrow,
Jim Giaquinto