S&P, NASDAQ Back to Record Highs Despite DOJ Review

Yesterday’s announcement of a broad antitrust investigation into big tech failed to ruffle the market’s feathers on Wednesday.

Instead, tech threw caution to the wind and led two of the major indices back to all-time highs in the session! 

The NASDAQ advanced 0.85% (or about 70 points) to 8321.5 thanks in large part to a solid day for chips, while the S&P increased 0.47% to 3019.56.

These marked record closes for both indices.

But the Dow wasn’t so fortunate as the industrials suffered through disappointing reports from staples like Boeing and Caterpillar. The index came off its lows, but still lost 0.29% (or around 79 points) to 27,269.97.

The market doesn’t seem concerned about the Department of Justice taking a magnifying glass to big tech. Shares of the FAANGs slipped afterhours on Tuesday in the wake of the announcement, but there was no follow through on Wednesday as Facebook and Amazon were both higher.

(By the way, Netflix finally snapped its nine-session losing streak that stretched back to before its disappointing subscriber count from its recent report. Shares were up nearly 3.5% today.)

Going back to Facebook, the social media giant’s report after the close had much of the market’s attention. And it didn’t disappoint! Shares are up more than 2% afterhours, as of this writing, thanks to second-quarter earnings and revenue beating expectations.

We also saw strong reports this morning from UPS and AT&T, as this earnings season continues to be better than the dire expectations heading into it.

After the market tomorrow, we’ll be getting reports from Amazon and Alphabet.

Today's Portfolio Highlights:  

Home Run Investor: The portfolio took profits on two positions today and then immediately replaced one of them. Brian decided to “pull the ripcord” on his aerospace names by selling Astronics (ATRO) and Wesco Aircraft Holdings (WAIR) for gains of 18.6% and 7.1%, respectively. The new addition is Synaptics (SYNA), a Zacks Rank #2 (Buy) leader in designing and marketing of human interface solutions like touchpads and biometric fingerprint sensors. Now that the stock has recovered nicely from its lows, the editor thinks it will get back to the $40s. He also likes that SYNA has beaten the Zacks Consensus Estimate for four straight quarters with an average surprise of nearly 12%. Read the complete commentary for more and get ready for replacement pick #2 soon.

Surprise Trader: Last quarter, Controladora Vuela (VLRS) reported earnings of 26 cents per share, which blew past the Zacks Consensus Estimate for a loss of 18 cents. It had a triple-digit beat in the previous quarter as well… and Dave is looking for a three-peat tomorrow after the bell. The stock has a positive Earnings ESP of over 300%! It is also part of a space (Airlines) in the top 12% of the Zacks Industry Rank. The editor added VLRS on Wednesday with a 12.5% allocation. In order to make room for this new buy, Dave sold his stalled position in Cleveland Cliffs (CLF) for a 4.5% return in less than two weeks. Read the full write-up for more on today’s moves.

All the Best,
Jim Giaquinto

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