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S&P Stays Above 3,000 as Market Pulls Back

Jim Giaquinto

Stocks took a step back from all-time highs and a three-day winning streak on Thursday as earnings season continued its deluge of reports.

Tech may have led the market higher on Wednesday, but the space double-backed today and sent the NASDAQ lower by 1% (or nearly 83 points) to 8238.54.

In its first session after reporting second-quarter results last night, Facebook dipped 1.93% despite beating earnings and revenue expectations.

The S&P saw a healthy decline as well, but managed to stay above 3,000. It was down 0.53% to 3003.67.

The NASDAQ and S&P opened the session at all-time highs, so a bit of a pullback wasn’t a surprise especially as we wait on more earnings reports and the Fed meeting next week.

The Dow was within 10 points of its own record high just a couple days ago, but since then it’s had back-to-back losses. It slipped 0.47% (or nearly 130 points) on Thursday to 27,140.98, though it was down by about 200 points at its worst.

That Fed meeting next week can’t come soon enough. Practically everybody expects a cut, but that won’t keep the market from worrying as it did today after ECB President Mario Draghi failed to be dovish enough for many investors.

It will be interesting to see how this market reacts to the Q2 GDP report tomorrow.

But earnings season is happening right now, and we got a couple big FAANG reports after the bell. As of this writing, shares of Alphabet (Google) have soared 9% afterhours as the search giant beat on both the top and bottom lines while announcing a $25 billion share repurchase program.

Amazon beat sales expectations, but missed earnings. However, shares are down less than 2% at the moment.

The market is coming off its first weekly loss of July. Now we head into the final session of this week with the S&P and NASDAQ each up through Thursday, but the Dow still down.

Bring on Friday!

Today's Portfolio Highlights:

Surprise Trader: For the past two-plus years, Rudolph Technologies (RTEC) has been beating the Zacks Consensus Estimate at earnings time. Dave doesn’t expect that will change when this company reports again on Tuesday after the bell. It beat by more than 40% last time and has a positive Earnings ESP of 2.75% for the upcoming release. RTEC is also part of the Electronics – Manufacturing Machinery space, which is in the Top 13% of the Zacks Industry Rank. The editor added the stock on Thursday with a 12.5% allocation. He also made some room by selling the stalled Novartis (NVS) position for a return of 3.3% in about a week. Read the complete commentary for more on today’s moves.

Home Run Investor: It only seems right that this portfolio would add a company known for its Grand Slam breakfasts. Denny's Corp. (DENN) is a large and iconic restaurant chain that has beaten the Zacks Consensus Estimate in three of the last four quarters with a positive surprise of 30% most recently. Brian added DENN on Thursday because of its strong-looking chart and also to diversify a bit away from tech. Read the full write-up for more on this new addition.

Have a Great Evening,
Jim Giaquinto

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