Dow Jumps Nearly 1% to Join S&P, NASDAQ at New Highs

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All three of the major indices are now at fresh highs as the Dow joined its counterparts at the top of the mountain after a strong Wednesday rally.

The index only needed a little more than 100 points to make history, but it got approximately 275! The Dow led the way higher today by gaining 0.94% to a record 29,551.42. Yesterday, it was bringing up the rear after slipping by less than 1 point.

The other indices have been making highs all week and today was no exception. The NASDAQ jumped 0.90% (or about 87 points) to 9725.96 and the S&P was up 0.65% to 3379.45.

The coronavirus continues to spread, though it looks like the pace may be slowing.  For the second day in a row, the number of new cases declined.

Stocks were already shrugging off the sickness most of the time, but this is certainly welcomed news for a market that’s concerned of the impact on the global economy.

If it fades even further in the headlines, then it could remove a major uncertainty for investors and allow even more emphasis to be put on this solid earnings season and strong economy.   

Speaking of earnings, Sheraz Mian’s most recent Earnings Trends says the number of S&P companies that have beaten EPS estimates so far remains well over 70%.   

The major indices have now gained approximately half of last week’s epic rally. The NASDAQ heads into Thursday’s session with a gain of about 2.2% over the past three days, while the other two are up about 1.5%.

Just to remind you, the tech-heavy index soared 4% last week, while the S&P and Dow each jumped 3%.

It wouldn’t be a surprise for coronavirus fears to start up again (especially on Friday). At the same time though, the market still wants to move higher.

Let’s see what the next two days have in store for us.

Today's Portfolio Highlights:

Home Run Investor: The portfolio plans to make a move (or maybe two) in the coming days, but first Brian wanted to clear some room and bank a couple profits. After recently dipping below $50, the editor is underwhelmed by today’s modest rebound from Diodes (DIOD). Therefore, he decided to sell this manufacturer of semiconductor products and collect a 52.1% return. Brian also sold Apollo Medical (AMEH) for 5.7%. Read the full write-up for today’s commentary and more on these moves, and be on the lookout for a replacement pick tomorrow.

Insider Trader: The portfolio finally found enough insider activity to make an addition on Wednesday. Hillenbrand (HI) is an industrial products company that operates in two distinct segments: Batesville (its casket and cremation business) and the Process Equipment Group. Shares have plunged 32% in the last year, including 13% year to date. As a result, the stock is “dirt cheap”. In the days after its quarterly report, the Senior VP of Strategy & Corporate Development and the General Counsel both bought shares of their own company. Tracey considers these moves to be a strong signal, especially the 1000 shares bought by the “normally risk adverse” head lawyer. The editor added HI on Wednesday with a 10% allocation and still has plenty of cash for future moves. Read the full write-up for a lot more on this new addition.  

Counterstrike: A strong quarterly performance finally put a charge into shares of Ralph Lauren (RL). You know this Zacks Rank #1 (Strong Buy) premium lifestyle products company and probably own something from their catalog. Earlier this month, they beat quarterly earnings by 16% and guided Q4 revenue higher. Shares finally broke out above $120 before sliding again. Jeremy thinks this stock is poised to recapture the momentum and possibly get to the $140 level, so he added RL on Wednesday with a 9% allocation. The editor also sold Shoe Carnival (SCVL) and IPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) for slight gains. Read the complete commentary for a lot more on today’s moves, including a look at RL’s chart.

All the Best,
Jim Giaquinto

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