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S&P Ends a Strong April with 3rd Straight Record Close

Jim Giaquinto

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The NASDAQ got caught in between last night’s revenue miss from Alphabet and concerns about tonight’s report from Apple. As a result, the index pulled back in Tuesday’s session, bringing an end to two consecutive days of all-time highs.

However, the S&P again inched out a tiny advance by the closing bell to keep its record-breaking run alive!

Google parent Alphabet really threw a monkey wrench into the NASDAQ’s momentum by dropping approximately 7.7% the day after its disappointing top-line results. And that concern transferred over to Apple, which slipped nearly 2% ahead of its own report after the bell. 

The index couldn’t fight both of these tech giants. It declined 0.81% (or about 66 points) to 8095.39. 

The S&P looked like it might take a break too, but it eventually bounced back and waffled around breakeven in the final hour. It settled with a gain of 0.10% (or a little less than 3 points) to 2945.83. That’s good enough for its third straight record high! 

The Dow was actually the best performer of the day, advancing 0.15% (or about 38 points) to 26,592.91.

The market just completed another month of impressive gains. The NASDAQ advanced by nearly 5% in April and the S&P jumped almost 4% as both indices fully recovered from the December correction. The Dow hasn't reached new highs yet, but was still up a little more than 2.5% in the month.

The worry over Apple’s results proved to be unnecessary. Shares of the iPhone maker and soon-to-be streaming giant are up approximately 5.5% afterhours as of this writing. It beat the Zacks Consensus Estimate by nearly 4% for its fiscal second-quarter, while also topping on revenue and offering a good guidance. 

In addition to the continuation of earnings season, Wednesday’s session also includes a policy decision from the Fed. No one is expecting a change in rates, but everyone will be paying attention to the language. The Committee’s sudden dovish turn is the biggest reason why we’ve enjoyed such a strong start to 2019. The market will be listening closely to make sure everybody’s still on the same page. 

Today's Portfolio Highlights:

Surprise Trader: The portfolio found an indirect way to benefit from rising energy prices by adding Cactus (WHD) on Tuesday. This is not an oil & gas company, but it does sell and rent highly-engineered wellheads and pressure control equipment to that space. This Zacks Rank #2 (Buy) has a positive Earnings ESP for the quarter coming after the bell tomorrow. Dave notes that earnings and sales are expected to jump 38% and 33%, respectively, from last year. The editor likes what he sees and so he added WHD to the service today. Read the complete commentary for more. 

Zacks Short List: The portfolio swapped out three names this week, which included short-covering Twitter (TWTR), Teradata Corp. (TDC) and ServiceNow (NOW). The new buys that replaced these names are World Wrestling Entertainment (WWE), Ionis Pharma (IONS) and Baidu (BIDU). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.

Counterstrike: "After hours Apple reported a great quarter, helping the stock up over 5%. The company beat by $0.10, beat on revenues, gave an in-line iPhone revenue number, guided Q3 revenue above consensus and raised their dividend 5%. Oh, and they plan to buy back another $75 billion of stock.

"Apple’s quarter will likely help tech stocks tomorrow and help the markets keep a positive tone.

"Tomorrow we will get the FOMC, where we expect nothing to happen. As always, watch out for the change in tone of the language. Any hint of a rate hike could rattle markets.

"The Nasdaq will be up on Apple tomorrow, getting back what it lost from Alphabet. It will be very interesting to see how the market handles the up move. Can we hold? Or will it be faded like a lot of the moves we have seen. It might not matter as the Fed could change a lot tomorrow. But overall, I’m expecting a quiet day."
-- Jeremy Mullin

All the Best,
Jim Giaquinto

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