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S&P, NASDAQ Reach New Closing Highs on 3rd Day of Rally

Jim Giaquinto

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Another major index closed at a record high on Wednesday, as the market continues to recover from the coronavirus impact with a third straight session of sharp gains.

The S&P is back above 3300 by rising 1.13% to a new closing high of 3334.69. The NASDAQ was the first to make history yesterday, and continued into record territory today with an advance of 0.43% (or approximately 40 points) to 9508.68.

The NASDAQ has been leading the market recently and was the only major index not to fall into negative territory for 2020 during the virus selloffs. But it lagged its counterparts on Wednesday because of Tesla.

In addition to the coronavirus and earnings season, this electric car company and cultural phenomenon was one of the biggest stories in the market as it soared over 50% in 7 days.

However, Tesla cooled off today and slid over 17%, which took a bite out of the NASDAQ but couldn’t push it into the red.

The Dow had its third straight session with a triple-digit advance… and today marked the sharpest improvement. It reclaimed 29K by adding 1.68% (or more than 483 points) to 29,290.85.

The index has jumped more than 1000 points in three days, which more than made up for the 600 points lost on Friday. It goes to show just how much of an impact the coronavirus had on this index, as it still has not made a new high.

However, it’s now less than 60 points away!

Speaking of the coronavirus, there were some reports today that progress was being made on a vaccine or some type of treatment. However, the World Health Organization threw some cold water on those stories. So the sickness keeps spreading, but isn’t frightening the market as much as in the previous two weeks.

Plus, we’ve gotten a lot of good news of late to help counterbalance any virus impact. In addition to a strong start to earnings season, the ADP employment report today nearly doubled expectations. The private sector added 291,000 jobs last month, instead of only 150,000.

The big government employment situation report comes on Friday.

Also, the ISM non-manufacturing index came in at 55.5 last month, which easily improved upon 50 in December. This comes just a few days after ISM’s manufacturing index, which marked the first month of expansion (over 50) since July.

Today's Portfolio Highlights:

Surprise Trader: Everyone likes Denny’s (DENN)! Dave likes this popular restaurant chain so much that he added it to the portfolio on Wednesday. This Zacks Rank #1 (Strong Buy) topped the Zacks Consensus Estimate for three straight quarters, and has a positive Earnings ESP of 5% for the quarter coming after the bell on Tuesday, February 11. Current year estimates call for 1.47% EPS growth while next year’s number forecasts 18.12% growth. The editor added DENN with a 12.5% allocation. He also sold Cree (CREE). Read the full write-up for more on today’s moves.

Counterstrike: Shares of Qorvo (QRVO) surged after reporting strong results back in November, and then jumped again on another impressive performance last month. However, program selling has brought the stock back down to earth. In fact, it has slipped below $110 and its 50-day moving average. Once these games are over, Jeremy thinks QRVO will break back above $112 and keep moving. The editor added this Zacks Rank #1 (Strong Buy) on Wednesday with an 8% allocation. The company provides core technologies and radio frequency solutions for mobile, infrastructure and aerospace applications. Read the full write-up for more. 

Home Run Investor: After crushing its earnings report yesterday, shares of Evoqua Water (AQUA) were down about 2% this morning. Brian saw a great opportunity, so he quickly bought this Zacks Rank #2 (Buy) provider of mission critical water treatment solutions. As he expected, the stock finished the day higher by 1.17%. Learn a lot more about this new addition in the full write up.

Large-Cap Trader: Shares of biopharma giant Biogen (BIIB) soared 17.85% on Wednesday after winning a patent challenge from Mylan regarding its multiple sclerosis drug Tecfidera. The company was easily the best-performing stock of the day among all ZU positions. BIIB now has the biggest gain for this portfolio, rising more than 40% since being added on July 31 of last year.

All the Best,
Jim Giaquinto

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