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S&P, Dow Take a Rest, but the NASDAQ Keeps Hitting New Highs

Jim Giaquinto

SPECIAL ALERT: The latest episode of the Zacks Ultimate Strategy Session will be available for viewing no later than this Friday, December 20. Kevin Matras, Sheraz Mian, Kevin Cook, David Bartosiak and Dr. John Blank will cover the investment landscape from several angles in this informative event.

Don’t miss your chance to hear:

▪ Sheraz and John Agree to Disagree on the underlying drivers of the 2020 stock market actions and overall tone of the trading in “Next Year, I am Bullish”
▪ Kevin Matras answers your questions in Zacks Mailbag
▪ John and Kevin Cook choose one portfolio to give feedback for improvement
▪ And much more

So be sure to mark your calendar then log on to Zacks.com and bookmark this page.

You got the feeling from yesterday’s lackluster session that the bulls were getting a little tired after five straight days in the green, so its really no surprise that two of the major indices couldn’t hold onto their gains through the close.

However, the NASDAQ just keeps rolling along. The tech-heavy index now has a 6-day winning streak after hanging onto an advance of 0.05% (or a little more than 4 points) to 8,827.73.

That’s another closing record for the index!

The other major indices couldn’t stay on the plus side. A final-hour slide pulled the Dow lower by 0.10% (or nearly 28 points) to 28,239.28. Meanwhile, the S&P is finding difficulty in getting over 3200, as it slipped 0.04% to 3191.14.

The five-day winning streaks for these indices are now over.

This was the first negative session for the Dow and S&P since the Phase 1 trade deal was agreed to in principle late last week. A new round of all-time highs followed.

But we haven’t heard much about the deal since then, which is actually great for those investors who are tired of hearing about it and still suffering from whiplash after all the conflicting trade headlines in the runup to the agreement.

On the other hand though, it also means that excitement over the deal has waned. And the other big market news on Wednesday was a negative one, as FedEx dropped 10% after fiscal second-quarter earnings fell short of expectations.

However, today’s late pullback hasn’t impacted the market’s or the editors’ optimism heading forward. The indices needed to take a break after running hot for a solid week.

There’s still more than enough time in 2019 for a new round of record highs and for the S&P to get past 3200.

Today's Portfolio Highlights: 

Technology Innovators: Chip names have been very strong lately, so Brian went back to the well on Wednesday and added another stock from this space. He picked up Alpha and Omega Semiconductor (AOSL), a Zacks Rank #2 (Buy) power semiconductors company. The stock has beaten the Zacks Consensus Estimate in three of the last four quarters with an average surprise of 24% over that time. AOSL also has a good valuation, no shorts and is right around its 52-week high. Read the full write-up for more on this new pick. 

Counterstrike: Shares of Steelcase (SCS) soared more than 16% today in the wake of its strong third-quarter report, which included a positive earnings surprise of 31% and a raised guidance. Jeremy decided this was a good time to sell half of the position for a 22% return in less than 2 months! He’ll hold onto the rest to see how far it can go. Check out the full write-up for potential targets.

Home Run Investor: A 32% short interest position in Surgery Partners (SGRY) has “turned this stock into a rocketship ride higher”, according to Brian. This healthcare services company missed earnings estimates for seven straight quarters before finally meeting the last time out. The editor thought the shorts should’ve covered right there, but they were greedy and hung on too long. Now, earnings estimates are heading higher, which has made SGRY a Zacks Rank #2 (Buy). Brian thinks the chart is solid and the stock is headed to $20, so he added it on Wednesday. Read the full write-up for more.

Have a Good Evening,
Jim Giaquinto

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