S&P Back Above 3,000 after Late Bounce

We enjoyed a nice change of pace on Wednesday as the major indices moved higher in the final hour of trading, giving the S&P its second close above 3,000 in the past three days. 

The index climbed 0.28% today to 3004.52, while the NASDAQ advanced 0.19% (or more than 15 points) to 8119.79. The Dow was up 0.17% (or nearly 46 points) to 26,833.95.

While the indices each closed well off their highs in the session, they still avoided replaying yesterday’s trajectory of completely losing earlier gains.

But this performance didn’t come easy on Wednesday. Stocks had to fight through a few challenges, including soft reports from companies like Caterpillar and Boeing.

The former company’s report, which included an earnings miss and a reduced guidance, feeds into the market’s fear of slowing global economies coming home to the U.S.

Nevertheless, CAT recovered along with the market and ended higher by 1.2%. And BA, which has really taken a bite out the Dow lately, finished the day with a more than 1% advance.

And let’s not forget that Texas Instruments offered a weak revenue guidance last night, which is concerning for the whole chip sector moving forward this earnings season. Shares were down about 7.5% today, but the market fought through it.

After the close, Microsoft reported better than expected fiscal first quarter results. However, shares are down a bit afterhours as of this writing, perhaps due to a decline in revenue growth for its Azure cloud business.

The market remains content with earnings season. It’s certainly not the best we’ve ever seen, but its nowhere near as bad as feared.

And will all know how much the market loves to hear “better than expected”. But if this continues, will it be enough for the S&P to make up the less than 1% it needs to make new highs? 

Today's Portfolio Highlights:

Surprise Trader: Retail did pretty well for the portfolio last quarter, so Dave decided to mosey back into Boot Barn (BOOT). This Zacks Rank #1 (Strong Buy) is a retail chain devoted to western and work-related footwear, apparel and accessories. The company has an excellent history of beating expectations, amassing an average surprise of more than 26% over the past four quarters. BOOT looks to continue that ride with a positive Earnings ESP of 4.13% for the quarter coming after the bell next Wednesday, Oct 30. A selloff this morning provided the editor with a great entry point for a 12.5% allocation. Read the complete commentary for more.  

TAZR Trader: Are the semis pricing-in the first half’s potential recovery way too soon? Kevin certainty thinks that’s the case, which was backed up yesterday when Texas Instruments offered a weak revenue guidance that wrecked its shares. The editor thinks the chips may start paying for their excessive optimism, so as suggested last night he added Direxion Semi 3X Bear ETF (SOXS) on Wednesday with a 5% allocation. This position will rise three times as much as the space moves down. Read the full write-up for more.

Home Run Investor: It was announced yesterday that Hanger (HNGR) will join the S&P 600 prior to the open on Monday, October 28, replacing Rudolph Technologies. Brian saw a study that suggests stocks joining this index typically rise 20% through the 12 months following the date of the announcement. Well, the editor is expecting a lot more than that from this orthotic and prosthetic patient care company. On Wednesday, HNGR became the best performing name among all ZIC portfolios with a surge of nearly 9.5%. The stock is now positive in the portfolio with expectations for a lot more improvement moving forward. It was added to the portfolio on September 11.

Have a Great Evening,
Jim Giaquinto

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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