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Resurging Tech Lifts NASDAQ to New Record

By Zacks Investment ResearchStock MarketsJun 22, 2021 09:15PM ET
Resurging Tech Lifts NASDAQ to New Record
By Zacks Investment Research   |  Jun 22, 2021 09:15PM ET
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SPECIAL ALERT: The travel industry lost $4.5 trillion due to the pandemic. Now that restrictions are lifting, consumers are making up for lost time. Airbnb’s CEO called it a “rebound unlike anything we’ve seen in a century.” And Carnival (NYSE:CUK) Cruise Line reported that booking for 2022 is already outpacing record levels. Travel Mega-Boom: 8 Stocks for the Trillion-Dollar Rebound highlights 8 stocks set to soar as Americans begin traveling freely again. Some of these stocks are tripling the S&P year to date – and they’re just getting warmed up. Log on to to read the report now.

Tech is obviously cool again, as the NASDAQ has been outperforming its counterparts for weeks now and set a new record on Tuesday. Meanwhile, the S&P is less than ten points away from making its own history.

The NASDAQ rose 0.79% (or about 111 points) to a fresh high of 14,253.27. That’s the exact same percentage it was up on Monday. Investors are back to loving tech after cheating on the space with re-opening names earlier this year.

In fact, all of the FAANGs were higher on Tuesday, especially Netflix (NASDAQ:NFLX, +2.4%) and Facebook (NASDAQ:FB, +2%). Meanwhile, Amazon (NASDAQ:AMZN) rose 1.5% and Apple (NASDAQ:AAPL) was up 1.3%, while Alphabet (NASDAQ:GOOGL) (GOOG) lagged with an advance of only 0.43%. Microsoft (NASDAQ:MSFT) rose 1.1% as well.

The S&P advanced 0.51% to 4246.44, which puts it just about 0.2% shy of its own record. This index and the NASDAQ were both at record highs as recently as Monday, June 14, though that ended up being a negative week for all.

The Dow calmed down after plunging more than 500 points on Friday and then gaining more than 500 points yesterday. The index added onto Monday’s nearly 1.8% surge by another 0.20% (or about 68 points) to 33,945.58. In case you were wondering, this one is about 2.1% away from a new closing high.

The major news on Tuesday was Fed Chair Jerome Powell’s testimony to the House Select Subcommittee on the Coronavirus Crises. Actually, ‘news’ may not be the right word, since he just reiterated much of what he’s been saying for months now. Once you filter out all the grandstanding from the politicians, Mr. Powell talked about things like this strong economic comeback and how rising inflation is likely to be transitory.

“During this afternoon's political hogwash, Powell's stoic demeanor and steadfast transitory inflation stance seemed to have prompted a sigh of relief in the markets. Powell did reiterate that he would utilize the necessary levers (asset purchase tapering and Fed Funds rate increase) to control inflation if it did get out of hand,” said Dan Laboe in Headline Trader.

“All in all, this hearing changed nothing as far as market sentiment goes.”

Today's Portfolio Highlights:

Stocks Under $10: For over a year now, Maxar Technologies (NYSE:MAXR) has routinely been featured on the top performers scorecard above. However, the stock has now slipped to a Zacks Rank #4 (Sell). After recovering from a 25% selloff, Brian felt it was time to say goodbye to one of the portfolio’s most successful positions. He sold MAXR on Tuesday for a nearly 392% profit in approximately 15 months. The editor also got out of the much less impressive Titan International (NYSE:TWI) for a loss. The new addition is ammunition company AMMO Inc. (POWW), which is obviously a play on the recent success of firearms company Smith & Wesson (SWBI). Earnings estimates for POWW are inching higher, but it's still a Zacks Rank #3 (Hold). That could change quickly though, especially if POWW starts posting solid numbers. Brian was impressed by the 500% growth in the most recent quarter and is excited by expectations for topline growth of more than 2100% this year and another 200%+ next year. He thinks POWW could double from here. Read the complete commentary for more.

Surprise Trader: The next earnings season is right around the corner, so Dave made some room on Tuesday by selling Ulta Beauty (NASDAQ:ULTA) for more than 6% in a month and Dave & Busters (PLAY) for a slight loss. The editor is replacing one of those names today with the addition of specialty retailer Bed Bath & Beyond (BBBY). This Zacks Rank #2 (Buy) topped expectations by more than 48% last quarter and has a positive Earnings ESP of 52.38% for the quarter coming before the bell on Wednesday, June 30. As part of the retail – misc. space, BBBY is in the top 13% of the Zacks Industry Rank. Dave added the stock today with a 12.5% allocation. Read the full write-up for more on all this action. In other news, this portfolio had a top performer on Tuesday as Boot Barn Holdings (NYSE:BOOT) rose 4.4%.

Headline Trader: A significant institutional investment disclosure in Splunk (NASDAQ:SPLK) pushed this AI-powered cloud giant to the top of the scoreboard on Tuesday. The company jumped 11.3% to become the best performer of the session among all ZU names. The new funds will be used to help SPLK’s cloud transformation. “The firm has been in the process of transitioning its entire platform to the cloud for scalability. This vital business shift has been causing short-term margin pressures, and following several earnings misses, SPLK took a 50% haircut from its October highs to its low in early June. Now it is gaining enormous momentum to the upside after bouncing off a $110 support level. SPLK is finally back in the black after months of pain,” said editor Dan Laboe.

Zacks Short Sell List: This week's adjustment included two changes. The portfolio short-covered Las Vegas Sands (NYSE:LVS, +4.7%) and StoneCo (STNE), and then filled those spots by adding Maxar Technologies (MAXR) and Yandex N.V. (NASDAQ:YNDX). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short Sell List Trader Guide.

Insider Trader: "All eyes were on Capitol Hill today as Chairman Powell was testifying and some thought there might be a market moving blurb or two. There really wasn't.

"Powell stuck to the same story of last week's FOMC meeting which was: inflation is transitory. Also, he still sees a strong job market. Yawn.

"Stocks extended yesterday's rally with most of the indexes finishing higher except for the small caps, which lagged.

"The rotation continues into big cap tech as Microsoft hit new highs today, and joined the exclusive $2 trillion market cap club, and some of the FAANGs are close to breaking out yet again."
-- Tracey Ryniec

Have a Good Evening,
Jim Giaquinto

Recommendations from Zacks' Private Portfolios:

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Resurging Tech Lifts NASDAQ to New Record

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Resurging Tech Lifts NASDAQ to New Record

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