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Stocks Hold Onto Gains in Quiet Session

Jim Giaquinto

The April episode of the Zacks Ultimate Strategy Session will be available for viewing no later than Wednesday, April 10. Kevin Matras, Kevin Cook, Dr. John Blank and Sheraz Mian will cover the investment landscape from several angles in this popular event.

Don’t miss your chance to hear:

• Sheraz and John Agree to Disagree on whether the end of the U.S. – China trade war will spark a new leg in the bull market
• Kevin Matras answers your questions in Zacks Mailbag
• Sheraz and Kevin Cook choose one portfolio to give feedback for improvement
• And much more

Remember, we need your input. Please submit your questions for Zacks Mailbag and Portfolio Makeover by Thursday morning, April 4. Email now to mailbag@zacks.com.

Then log on to Zacks.com and bookmark this page.

After such an energetic start to the second quarter yesterday, it’s no surprise that the market would take a break in the following session.

Most importantly though, the major indices managed to either retain most of Monday’s rally or even add to it.

The NASDAQ again led the way with an advance of 0.25% to 7848.69, which adds onto yesterday’s nearly 1.3% surge. The S&P was basically breakeven, though technically it was up 0.05 of a point, or 0%.

But the Dow came nowhere near the positive side on Tuesday… and it’s almost all Walgreens’ fault. The drugstore company plunged 12.8% after missing second-quarter earnings and cutting its outlook.

As a result, the Dow’s three-day winning streak ended as the index slipped 0.30% (or nearly 80 points) to 26,179.13. That’s not a major decline to begin with, but it’s all the more palatable when you consider that the Dow soared 330 points just yesterday.

Well, this session was just about as boring as yesterday’s was exciting. But that’s all right. Stocks are still waiting for a big catalyst to jump-start the next move higher. It would be great if that boost came from a trade deal. However, while the market still expects some kind of agreement to be signed, the whole issue has entered into an “I’ll-believe-it-when-I-see it” mode.

A solid earnings season would also be a good catalyst, but that’s weeks away.

So we may be entering into a slow period for the market as it looks for reasons to move higher. Therefore, yesterday’s sharp rally and today’s buoyancy make for a good one-two punch to start a new quarter during uncertain times.

Today's Portfolio Highlights:

Counterstrike: Shares of Ciena (CIEN) have plunged more than 17% from its highs since is quarterly report. However, this networking specialist for communications networks actually beat the Zacks Consensus Estimate by 10% in the quarter, while revenue also topped our expectations. Jeremy sees an opportunity here, especially since rising earnings estimates have made CIEN a Zacks Rank #1 (Strong Buy). The editor added the stock on Tuesday with a 9% allocation. Read the full write-up for more on this buy and to take a look at its charts.

Stocks Under $10: Commercial Vehicle Group (CVGI) supplies interior systems, vision safety solutions and other cab-related products for the global commercial vehicle market. Despite surprising by more than 11% in its most recent quarterly report, shares pulled back a bit. Brian Bolan didn’t want to add this stock as it was moving lower, but it has begun to doubleback and is now moving towards the $9 level again. The editor decided this was a good time to add this Zacks Rank #2 (Buy). Read the full write-up for a lot more on this new addition.

Healthcare Innovators: It was a big day for Sangamo Therapeutics (SGMO) as the biotech, along with its partner Pfizer, announced positive data from a clinical study for its severe hemophilia A gene therapy dubbed SB-525. The news sent shares of SGMO soaring by nearly 29% on Tuesday, which easily made it the best performing stock of the day among all ZU portfolios. It also led to solid performances from other gene therapy companies in the service, including CRISPR Therapeutics (CRSP, +6.9%) and Editas Medicine (EDIT, +5.3%).

Zacks Short List:
The adjustment this week included only one swap. The portfolio short-covered MercadoLibre (MELI) and replaced it by adding Schlumberger (SLB). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.

Have a Good Evening,
Jim Giaquinto

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