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Dow, S&P Slip 1% as Covid Cases Continue to Rise

Published 11/12/2020, 09:15 PM
Updated 07/09/2023, 06:31 AM

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The major indices all moved in the same direction on Thursday, but unfortunately that direction was lower as the vaccine euphoria waned amid a rise in coronavirus cases.

You really can’t blame the market for getting a little bit ahead of itself earlier this week. The Pfizer (NYSE:PFE)/BioNTech announcement on Monday was the best news we’ve heard in the pandemic era.

However, we’re still months away from the vaccine being available to the public… and that’s IF everything goes smoothly from here on out.

The problem right now, though, is the sharp rise in cases across the country and the possibility of more lockdowns. That’s what the market was focused on today.

The Dow moved lower for a second straight session, but this time the drop was much more severe at 1.08%. The index lost approximately 317 points to finish at 29,080.17.

But it’s still up more than 2.5% for the week heading into Friday, which isn’t too surprising after soaring just under 1100 points on Monday and Tuesday.

The S&P slipped 1% to 3537.01 and is now up 0.8% over the past four days. The NASDAQ outperformed its counterparts by declining only 0.65% (or about 76 points) to 11,709.59.

The latter index is still down by well over 1% heading into Friday. The NASDAQ lost about 3% in the first two days of the week after money rotated out of tech, but soared 2% yesterday.

Meanwhile, jobless claims came in at 709,000 last week, which beat expectations and was 48K better than the previous week. This marks the fourth straight reading below 800K.

Hopefully, we’ll be talking about “below 700K” moving forward.

Today's Portfolio Highlights:

Stocks Under $10: Money is finally returning to the market from the sidelines, so Brian sees a great opportunity to get exposure levels back up in all his portfolios. For this service, the editor picked up Immersion Corp. (NASDAQ:IMMR) on Thursday. This Zacks Rank #2 (Buy) develops hardware and software technologies that enable users to interact with computers using their sense of touch. Earnings beat the Zacks Consensus Estimate by 25% in the most recent report, which makes three positive surprises in the past four quarters. Margins are also showing a “dramatic improvement”. IMMR was a $10 stock back in early September, but it slipped approximately 35% from there. Brian thinks it’s about time for the stock to begin climbing again. Read the complete commentary for more on this addition, and don’t be surprised if there's another buy tomorrow. In other news, this portfolio had a top performer today as Avid Bioservices (NASDAQ:CDMO) advanced 6.1%.

Counterstrike: The vaccine news on Monday sent shares of Penn National Gaming (NASDAQ:PENN) sharply higher, but it didn’t last long. The stock pulled right back to its 50-day. Jeremy sees “a lot of meat on the bone” for this owner and manager of gaming and racing facilities. The editor is especially intrigued by its relationship with Barstool sports. The spike in coronavirus cases could be a problem for PENN if the country locks down again, but the Barstool betting app is very popular and will be a tailwind moving forward. Due to such unpredictability, the portfolio added PENN with a smaller 4% allocation and will buy more if necessary. Jeremy also thinks PENN will move along with DraftKings (NASDAQ:DKNG), which he believes will detail strong monthly players and revenue per player when it reports tomorrow. Read the full write-up for more.

Healthcare Innovators:
Only nine companies from the giant medical sector have Zacks Rank #1 (Strong Buy) status. On Thursday, Kevin added one of them. He picked up Hologic (NASDAQ:HOLX), which is a medical diagnostics provider that specializes in women’s health under normal circumstances. But these days, it's also a major provider of Covid testing products. In fact, the company serviced about 32% of all testing volumes in the fourth quarter with more expected in the future. As a result, HOLX had a fantastic “beat-and-raise” quarter recently, which led earnings estimates higher and convinced several analysts to raise their price targets. Read the complete commentary for more on this addition, including specifics on what the firms are saying. Meanwhile, the portfolio sold bluebird bio (BLUE) after losing patience with the company, but also had two of the biggest winners among all ZU names today with Global Blood Therapeutics (NASDAQ:GBT, +6.85%) and Moderna (NASDAQ:MRNA, +6.51%).

Home Run Investor: The shipping names have seen some big moves lately. Meanwhile, this portfolio needs to increase exposure. Therefore, it was a no-brainer for Brian to add Echo Global Logistics (NASDAQ:ECHO) on Thursday. This Zacks Rank #2 (buy) trucking/transportation name has beaten earnings estimates three times and matched once in the past four quarters. The editor also likes its valuation and thinks its chart looks “really good”. Read the complete commentary for more on this buy.

Marijuana Innovators: It hasn’t even been a week yet since Dave added GrowGeneration (NASDAQ:GRWG) to the portfolio, but this company is already a top performer for the day. The stock jumped more than 16% on Thursday, which more than doubled the runner up. GRWG reported another quarter of record revenues yesterday. The editor added this operator of specialty retail hydroponic and organic gardening stores last Friday. So far, it’s up a little more than 5% in the portfolio.

Technology Innovators: The Electronics – Manufacturing Machinery space is in the top 9% of the Zacks Industry Rank, so Brian thought this was a good place to make today’s addition. The editor picked up Axcelis Technologies (NASDAQ:ACLS), which makes ion implantation equipment used in the fabrication of semiconductors. The company has beaten the Zacks Consensus Estimate in each of the past four quarters with an average surprise of 43% in that time. Rising earnings estimates have lifted the stock to Zacks Rank #1 (Strong Buy) status. Brian also likes its valuation, and loves that operating margins are on the rise. He thinks that ACLS could be a real winner moving forward as it gets better and better at executing its business. Read the full write-up for more.

All the Best,
Jim Giaquinto

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