Sunday, December 4, 2022

Dow Jumps 4% This Week and S&P Hits New Record


Stocks have been bouncing all over the place lately as investors digest a very encouraging vaccine candidate on one hand and a surge in coronavirus cases on the other.

Yet, another rally on Friday led to sharply higher weekly results for two of the major indices and even a new all-time high.

The Dow rose 1.37% (or just about 400 points) today to 29,479.81. The index was up 4% this week, bringing its gain in November so far to more than 10%.

The Dow received a lot of attention recently as money flowed into the recovery names, but it was another index that made history on Friday.

The S&P advanced 1.36% to 3585.15, which marks a new closing high. It was up 2.2% over the past five days, which makes the two-week advance just under 10%.

Both the Dow and S&P reached intraday highs on Monday when news dropped that Pfizer (NYSE:) and partner BioNTech developed a vaccine that was 90% effective in preventing covid.

It was certainly the biggest piece of news this week. Actually, it may end up being the biggest piece of positive news for the whole year! And it certainly offset much of the concern stemming from rising coronavirus cases and the threat of more lockdowns.

Of course, one index’s profit can be another index’s loss. While the NASDAQ managed to gain 1.02% (or about 120 points) to 11,829.29 on Friday, it was down about 0.6% for the week.

The strong vaccine data led to some movement out of tried-and-true tech and into those names that would most benefit from a return to normal. The index plunged about 3% on Monday and Tuesday.

But let’s keep things in perspective. The index is still up more than 8% in November after soaring 9% last week.

What a crazy few days this has been! All of a sudden, investors are contemplating an end to this pandemic. Consider what a trainwreck this week could have been without that vaccine news, as the market would be transfixed by the alarming rise in cases.

However, let’s not put our guards down. There will be plenty of bumps in the road. You know what’s still a really good idea? A stimulus package!

Today’s Portfolio Highlights:

Surprise Trader: Sometimes you just need a tasty burger. That goes for people and portfolios! On Friday, Dave added Jack in the Box (JACK), which is one of the country’s largest hamburger chains with more than 2200 locations in 21 states. The company beat by more than 35% last time, and has a positive Earnings ESP of 2.27% for the report coming after the bell on Wednesday, November 18. The editor added JACK today with a 10% allocation, while also getting out of the slumping Clarus (NASDAQ:) position. Read the full write-up for more.

TAZR Trader: The recovery in Micron (NASDAQ:) stock has been great, but Kevin doesn’t think it has much more upside given that estimates are still moving lower (thus the Zacks #4 Rank). Analysts are still cautious about this earnings trough and their price targets remain just a little higher than the stock at $60. The editor sold this “megalodon of memory” on Friday while he could still get a more than 19% return in about five months.

Blockchain Innovators: There’s a difference between selling into panics and simply getting out of company that’s failing to rebound. Dave considers selling eGain (NASDAQ:) today as an example of the latter scenario. This provider of cloud-based customer engagement solutions dropped after its earnings report, but nobody is stepping in to buy. And now the stock has slipped to a Zacks Rank #4 (Sell). The editor decided to sell EGAN on Friday to secure an approximately 53% return in a little over seven months. Read the full write-up for more and get ready for an addition on Monday.

Options Trader: “It should also be noted that the Dow hit a new high close for the year. The S&P finished at a new all-time high close ever. Same goes for the . And the Nasdaq ended at its second highest weekly close ever.

“We are in the midst of an historic bull market. And this leg of it looks like it’s just beginning.

“The rising coronavirus cases remain a concern.

“But the optimism from the anticipated vaccines, and new therapeutics is superseding those concerns. Remember, the market is forward-looking. And 6 months from now, the virus is expected to be far less of a problem, in large part due to the vaccines.” — Kevin Matras

Have a Great Weekend!
Jim Giaquinto

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