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NASDAQ Reaches New Closing High as Rebound Continues

Jim Giaquinto

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▪ Ben and Dan Agree to Disagree on which FANG stocks will still rule in the 2020s
▪ Kevin Matras answers your questions in Zacks Mailbag
▪ Sheraz and Kevin Cook choose one portfolio to give feedback for improvement
▪ And much more

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Two of the major indices have now fully recovered from last Friday’s virus-induced selloff, as stocks rallied for a second straight day to start February.

The NASDAQ has always been a few steps ahead of its counterparts during this whole ordeal. It was the only major index that was still positive for 2020 after last week’s plunge.

And now, this tech-heavy index is back at an all-time closing high with today’s jump of 2.1% (or more than 194 points) to 9467.97.

That’s a gain of more than 300 points in two days, which leaves it approximately 150 points better than before the coronavirus selloff on Friday.

It should be noted that Tesla continued blowing the doors off the market on Tuesday with another surge of 13.7%. Furthermore, all of the FAANGs jumped by 2% or more in the session, except for a 2.6% slump for Alphabet after reporting soft revenues yesterday.

The S&P has recovered as well with a surge of 1.5% to 3297.59. The next stop could be retaking 3300, which was lost in the virus selloff.

And the Dow is almost there, after losing more than 600 points on Friday it has gained around 550 back in the past two days. The index finished higher by 1.44% (or nearly 408 points) on Tuesday to 28,807.63.

As fun as these past couple of days have been, we should keep in mind that the coronavirus is still spreading. However, the market appreciated news that China is considering stimulus efforts to combat the impact of the sickness.

In earnings news, the Disney+ streaming service, which only launched in November, now has 26.5 million subscribers.

This success helped the entertainment powerhouse beat on both the top and bottom lines in its quarterly report. After initially moving lower, shares are barely positive by about 0.4% afterhours as of this writing.

Today's Portfolio Highlights:

Stocks Under $10: With plenty of tech and medical names in the portfolio, Brian decided to add some diversification with an oil name on Tuesday. He picked up Berry Petroleum (BRY), a Zacks Rank #1 (Strong Buy) energy company that’s engaged in the acquisition, exploration, development and production of domestic oil and natural gas reserves. The stock is back to recent lows, but the editor thinks that will change if oil is bottoming out. He also really likes the valuation. Read the complete commentary for more on the addition of BRY and don’t be surprised if there’s another buy before the week is over.

Surprise Trader: For the past nine consecutive quarters, Silicon Motion (SIMO) has either beaten or met the Zacks Consensus Estimate. And now it has a positive Earnings ESP of 25.45% for the quarter being reported after the bell on Thursday, February 6. SIMO is also part of a space (electronics – semiconductors) that’s in the Top 6% of the Zacks Industry Rank. Dave likes what he sees and, therefore, added the stock on Tuesday with a 12.5% allocation. He also sold the stalled Rexnord (RXN) position for a 2.2% return in just under two weeks. Read the full write-up for more on today’s moves.

TAZR Trader: YouTube advertising monetization is getting better all the time and will soon silence those who were surprised by the contribution only being $15 billion after Alphabet (GOOGL) finally started revealing the segment’s numbers. Therefore, Kevin added GOOGL on Tuesday and would buy even more if it gets back to the 50-day near $1380. The portfolio also got back into NVIDIA (NVDA) and sold the short ETFs ProShares UltraPro Short QQQ ETF (SQQQ) and ProShares UltraPro Short S&P 500 ETF (SPXU) with the market soaring. Read the full write-up for a lot more on all of these moves.

Zacks Short List: This week's adjustment replaced half of the portfolio. The stocks that were short-covered include:

• NovoCure Ltd. (NVCR, +2%)
• Live Nation Entertainment (LYV, +1.8%)
• Vertex Pharmaceuticals (VRTX)
• GDS Holdings (GDS)
• Etsy, Inc. (ETSY)

The new buys that replaced these names were:

• Alteryx (AYX)
• China Lodging Group (HTHT)
• MGM Resorts Int'l (MGM)
• Newmont (NEM)
• Wynn Resorts (WYNN)

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

Have a Great Evening,
Jim Giaquinto

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