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Stocks Slip from Highs in Groggy Start to Week

After jumping by 1% or more last week amid strong earnings results and economic data; stocks retreated a bit from record highs on Monday. Hey... sometimes the weekend just isn’t enough time to re-charge your batteries.

The Dow snapped a three-day winning streak today by slipping 0.36% (or about 123 points) to 34077.63, while the S&P was off 0.53% to 4163.26. These indices both hit record highs on Thursday and Friday, bringing their weekly gains to 1.2% and 1.4%, respectively.

The NASDAQ saw the steepest decline on Monday as tech underperformed. It was off 0.98% (or about 137 points) to 13914.77. The index rose 1% last week and has moved 1% or more in four of the past five sessions. It’s about 1.3% away from a new record.

Last week deserves a little recap. Several of the biggest banks in the world reported solid results to begin earnings season, including JPMorgan (JPM) and Goldman Sachs (GS). Meanwhile, retail sales and jobless claims absolutely crushed expectations due to stimulus checks and a rapid vaccine rollout.

Earnings season continued today with reports from a couple household names: Coca-Cola (KO) and IBM (IBM). The soft drink staple beat by 10%, while Big Blue topped by 6%. IBM is up 2.9% after hours as of this writing, while KO is narrowly down by about 0.1%.

Perhaps the biggest earnings report of the week comes tomorrow when Netflix (NFLX) goes to the plate. This marks the first FAANG of the season. The streaming pioneer was up 1.45% today and is in the green after hours at the moment.

Speaking of the FAANGs, Insider Trader and Value Investor editor Tracey Ryniec takes a look at The Best of the FAANG Earnings Charts in a new video today.

Earnings season revs up this week with more than 300 companies reporting from a diverse group of industries. In addition to NFLX, we’ll also be hearing from Johnson & Johnson (JNJ), Procter & Gamble (PG) and Abbott Labs (ABT) on Tuesday.

Today's Portfolio Highlights:

Surprise Trader: The tools – handheld space is in the top 2% of the Zacks Industry Rank, so Dave added one of its best-known members on Monday. He picked up SnapOn (SNA), a Zacks Rank #2 (Buy) that has easily beaten the Zacks Consensus Estimate by double digits in the past two quarters. Now it has an Earnings ESP of 5% for the quarter coming before the bell on Thursday, April 22. The editor added SNA today with a 12.5% allocation, while also selling the rest of Acuity (AYI) for a 20% return in about three weeks and Commerce Bancshares (CBSH) for a slight loss. Read the full write-up for more.

Black Box Trader: The portfolio replaced four names in this week's adjustment. The stocks that were sold today included:

• Jabil (JBL, +7.1%)
• ExxonMobil (XOM, +1%)
• Valero Energy (VLO)
• United Natural Foods (UNFI)

The new buys that replaced these names were:

• Abercrombie & Fitch (ANF)
• CNH Industrial (CNHI)
• Marathon Petroleum (MPC)
• Toll Brothers (TOL)

Read the Black Box Trader’s Guide to learn more about this computer-driven service.

Options Trader: "There was no new news per se weighing on stocks. But after 4 up weeks in a row, there was bound to be some profit taking one of these days.

"Earnings season, which got off to a rousing start last week, continues to impress. And we'll get another 375 companies reporting this week, and another 994 next week. As you know, earnings season is always an exciting time since stocks typically go up during earnings season.

"We're also likely to hear more talk on infrastructure this week. That includes the size of the package, as well as the tax hikes to pay for it.

"In the meantime, the economic rebound continues to gain steam."
-- Kevin Matras

Until Tomorrow,
Jim Giaquinto

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