NASDAQ Moves Higher but the Market Remains Under Pressure

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The market was much calmer on Tuesday, but it’s still feeling the impact of rising coronavirus cases. Given the return of this environment, tech outperformed in the session as ‘stay home’ stocks again took centerstage.

Therefore, the NASDAQ managed an advance of 0.64% (or about 72 points) to 11,431.35. It plunged more than 1.6% on Monday.

All of the FAANGs were higher, especially gains of more than 2% for Facebook (NASDAQ:FB) and Amazon (NASDAQ:AMZN). Apple (NASDAQ:AAPL) also had a nice advance of 1.35%. These stocks, along with fellow FAANG Alphabet (NASDAQ:GOOGL) (GOOG), will all be reporting after the bell on Thursday.

Meanwhile, the S&P was off 0.30% to 3390.68, while the Dow slipped 0.80% (or around 222 points) to 27,463.19. These are much narrower losses than yesterday’s plunges of 1.86% and 2.29%, respectively.

However, the S&P is below 3400 for the first time in three weeks and the Dow has now lost about 870 points in just two days.

The big earnings news came after the bell, when software giant Microsoft (NASDAQ:MSFT) reported a fiscal first quarter that beat on both the top and bottom lines. Earnings rose by about 32% from last year, while revenue was up 12%. The big star, of course, was its cloud business.

Shares of MSFT were up 1.5% in the session, but are down more than 1% afterhours, as of this writing.

Another earnings report today came from chipmaker Advanced Micro Devices (NASDAQ:AMD), which also beat expectations and reported year-over-year advances in earnings and revenue.

However, the bigger news was AMD’s plan to acquire Xilinx (NASDAQ:XLNX) is a $35 billion all-stock deal.

AMD was down more than 4% in the session, while XLNX was up about 8.5%. Both are slightly higher after hours, as of this writing.

More than 250 more reports are coming tomorrow, including Visa (NYSE:V), Mastercard (NYSE:MA), United Parcel Service (NYSE:UPS), Amgen (NASDAQ:AMGN) and Boeing (NYSE:BA) just to name a few.

Today's Portfolio Highlights:

Stocks Under $10: Last week’s selling was quite advantageous considering yesterday’s sharp market plunge, but now its time to get back to buying. On Tuesday, Brian picked up Eton Pharmaceuticals (NASDAQ:ETON), a development stage biotech with a “healthy” pipeline that includes three commercially-available names and five that are still in the filing process. Earnings estimates are slowly moving higher, but that’s enough to make ETON a Zacks Rank #2 (Buy). The company is still operating at a loss, as biotechs tend to do, so there’s no PE. However, the editor is most impressed with topline growth of 511% for this year and 506% for next. That’s ‘serious growth’ and earns ETON a spot in the service. Read the full write-up for more. In other news, this portfolio had a top performer today as Funko (NASDAQ:FNKO) rose 9.8%.

Surprise Trader: For 13 straight quarters now, Cardtronics (NASDAQ:CATM) has beaten the Zacks Consensus Estimate. Last time, it topped by a lofty 262.5%. This Zacks Rank #2 (Buy) ATM services company seems set for a 14th consecutive surprise with a positive Earnings ESP of 18.42% for the quarter coming after the bell on Thursday, October 29. Dave added CATM on Tuesday with a 12.5% allocation, while selling First Financial (FFIN) for a slight loss. Read the full write-up for more on today’s action.

Value Investor: Not only did Exact Sciences (NASDAQ:EXAS) report solid third-quarter results on Tuesday, but the cancer diagnostics company also announced an acquisition. Shares soared more than 23% for the maker of Cologuard, which easily made it the best performer of the day among all ZU names. Revenue jumped nearly 87% in the quarter, while the loss was narrower than expected. It also bought privately-held Thrive Earlier Detection in a deal worth more than $2 billion. EXAS is now the third-best performer in the portfolio with a gain of more than 94% since being added in early April.

Zacks Short Sell List: This week's adjustment replaced four names in the portfolio. The stocks that were short-covered include:

• StoneCo (STNE, +4.1%)
• Ecolab (NYSE:ECL, +2.3%)
• Sociedad Quimica y Minera (SQM)
• Twitter (TWTR)

The new buys that replaced these names included:

• Alcon (NYSE:ALC)
• Canada Goose (GOOS)
• Hexcel (NYSE:HXL)
• TAL Education (TAL)

Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short Sell List Trader Guide.

Blockchain Innovators: The idea behind Dave’s addition of eXp World Holdings (NASDAQ:EXPI) back in late March was that a cloud-based real estate business would work well during this pandemic, especially with most of its agents working from home or a remote office. Well, that was a good idea! EXPI is currently the best-performing stock in the portfolio with a surge of nearly 465% since inception about seven months ago. And now the company just announced solid preliminary results for the third quarter, including a 95% jump in residential transactions closed in the quarter. Volume was up 112%, and the platform saw a 56% increase in the number of agents and brokers. The news sent shares of EXPI higher by almost 14.4% on Tuesday and made it one of the top performers of the day.

Until Next Time,
Jim Giaquinto