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Industrial-Strength Rebound for the Dow

Stocks were back in the green on Tuesday thanks to another round of positive earnings. The Dow got the biggest boost as industrial giants like Caterpillar and 3M reported better-than-expected results and encouraging outlooks. The index was also helped from the likes of General Motors and McDonalds. The Dow jumped 0.72% in the session to reach another all-time high at 23,441.8. 

The other two indices in the Big 3 didn’t have such dramatic advances, but they still reversed yesterday’s slight losses. The NASDAQ was up 0.18% to 6598.4 and the S&P advanced 0.16% to 2569.1. Tomorrow will be another busy day of earnings, but the market is paying particular attention to Thursday. On that day, some of the biggest technology names come to the plate, including Alphabet, Amazon, Intel and Microsoft, among others. 

In the portfolios, Healthcare Innovators and Stocks Under $10 both bought on Tuesday, while Short List swapped out four positions. Brian Hamilton is the new editor of Income Investor, and his first move was to cash in a double-digit winner. Read the highlights section below for more on all of these moves…

Today's Portfolio Highlights: 

Healthcare Innovators: Shares of Biogen (BIIB) slipped 7% this morning despite better-than-expected earnings and revenues in its third quarter report. Kevin has been waiting for something like this! He’s been looking for a good spot to start a long-term position in this bluechip biotech, so he jumped at the chance to pick up this stock while it was just a little over $300. Read the full commentary for more on this new addition. 

Stocks Under $10: Given the solid economy, Brian Bolan wants to be in the financial space. He decided to add Elevate Credit (ELVT), which focuses on helping people who don’t have a credit history or are “invisible” to the regular system. This young company has only reported twice, but it beat both times. Most recently, it had a huge earnings surprise of 14 cents. As the business matures, ELVT is seeing it’s write-offs decrease. The editor thinks this is a double-digit stock, and likes its topline growth rates of 18% for 2017 and another 25% for 2018. Read a lot more about this new addition in the full write-up. 

Income Investor: In his first move as the new editor of the portfolio, Brian Hamilton sold Enterprise Products Partners (EPD) for an approximately 14% profit. The pipeline operator slipped to a Zacks Rank #4 (Sell) from a Zacks Rank #3 (Hold), which is something Brian doesn’t want for the service. He plans to add two more positions later this week. Make sure to check out the Income Investor Introduction video to find out what to expect from the new manager. 

Zacks Short List: The portfolio swapped out four names this week. The short-covered stocks included:

• Continental Resources (CLR, +10.1%)
• ConocoPhillips (COP)
• DigitalGlobe (DGI)
• EOG Resources (EOG) 

The new buys replacing these names are:

• Charter Communications (CHTR)
• Blackhawk Network (HAWK)
• Molina Healthcare (MOH)
• Teradata Corp. (TDC) 

Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.

Momentum Trader: "If there’s one theme to this market rally over the last few weeks it’s this, “The Dow Don’t Care.” That’s right folks, it doesn’t matter if small caps participate or not. It doesn’t matter if the dollar flexes or folds. Tax reform schmax reform. No matter what’s going on in equity markets...the Dow don’t care. It just goes up, nearly every day. 

"A big reason for the Dow rally was CAT with the big beat. They outperformed expectations by 54%, with EPS coming in at $1.95 versus consensus estimates calling for $1.27. That was enough to jumpstart the rally this morning. 

"No matter what’s happening in the market the large caps are finding a way to win. That is as much a stamp of approval on the world economy as it is the US economy. If this earnings season can continue to support the move, then we should be heading into a very happy new year." -- Dave Bartosiak 

All the Best, 
Jim Giaquinto

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