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Rally Sends Dow Past 25K and S&P Over 3K

Money continues flowing into the names most impacted by the pandemic, helping the market recover a couple of milestones on Wednesday amid another sharp rally. 

The Dow, which has now gained more than 1000 points in the past two days, managed to close above 25,000. The index was up 2.21% (or about 553 points) to 25,548.27. It jumped approximately 530 points on Tuesday.

The S&P also recaptured a milestone by rising 1.48% and closing above 3000 at 3036.13.

Both of these indices poked their heads above those marks yesterday, but sluggishness in the final hour ruined the momentum. However, stocks rallied late today and closed right around their highs of the session.

The NASDAQ had led the rally off the coronavirus lows since tech names were seen as part of the suddenly important stay-at-home economy. But now that we seem to be inching our way to re-opening, investors are giving beaten-down spaces some love.

However, that leaves the NASDAQ out in the cold. The index spent most of the session in the red, but it too got caught up in the late upsurge and finished higher by 0.77% (or about 72 points) to 9412.36.

In addition to all 50 states slowly getting back to business, we’ve also been treated to some good news on the vaccine front in recent days from the likes of Moderna (MRNA), Novavax (NVAX) and Merck (MRK).

As a result, the market is in a pretty good mood right now and on track for a second consecutive positive week.

Of course, there are always challenges on the horizon. Tomorrow brings the latest read on jobless claims, which is expected to lift the total number of people who have lost their job during this shutdown to more than 40 million. Analysts expect over 2 million more claims were filed last week.

But the market has been shrugging off horrible jobs data for a while now, choosing to look toward the future rather than the past.

However, it might be harder to shrug off the increasing tensions with China. On Wednesday, the House authorized sanctions for human rights violations and Secretary of State Mike Pompeo stated that Hong Kong could no longer be viewed as autonomous.

For now though, nothing beats the market’s excitement of the economy getting back on its feet. Let’s see if that optimism continues in the final two days of this short week.

Today's Portfolio Highlights:

Home Run Investor:
Even though MYR Group (MYRG) still looks good, this specialty contractor has slipped to a Zacks Rank #4 (Buy). Brian decided to sell the stock and take a nice 13.4% profit in a little over a month. The editor filled that open spot by adding EverQuote (EVER), a Zacks Rank #2 (Buy) that provides an online marketplace for insurance shopping. The company has a great earnings history with beats in each of the last four quarters. In fact, some of those positive surprises were so big that the average beat in that time is 86%. Read more in the full write-up.

Surprise Trader: Despite all the challenges out there, retail stocks have been doing pretty good after their earnings reports this season. So Dave is really interested in the release from Williams-Sonoma (WSM) after the bell tomorrow. Not only is this company a well-known specialty retailer of premium quality home products, but it also has a positive Earnings ESP of 602%! In other words, there’s a good chance that WSM will stretch its consecutive positive surprise streak to 17 quarters tomorrow. The stock was added on Wednesday with a 12.5% allocation. To make room, the editor sold Magellan Health (MGLN) for a nice 25% return in less than three weeks. Read the full write-up for more. By the way, the portfolio's CAE (CAE) position was one of the Top 5 performers of the day with a gain of 8.7%.

Insider Trader: The new addition to the portfolio is a small-cap exploration and production company… but it’s NOT tied to oil. Comstock Resources (CRK) is heavily weighted toward natural gas, which is expected to come back into favor in the second half of the year. Shares dropped after the announcement of a $5 common stock offering, which prompted three insiders to buy. The CEO, the CFO and a director all bought on May 14. In addition to all this, CRK has not been materially adversely impacted by the coronavirus. Tracey added the stock on Wednesday with a 10% allocation. Read the complete commentary for all the specifics on this new addition. This portfolio also had the second-biggest winner of the day among all ZU names, as TrustCo Bank Corp. NY (TRST) advanced 10.22%.

Until Tomorrow,
Jim Giaquinto

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