NASDAQ Closes at New High as Coronavirus Fears Subside

Fears of the coronavirus again impacted the market this morning, but the major indices mounted a nice comeback that ended with a new closing high for the NASDAQ.

Even though the sickness has now spread to more than 600 people and killed 17, the World Health Organization says it’s too early to consider it a public health emergency.

That was good enough for investors, who were biting their nails over the possibility of another SARS-like situation.

The end result was a second straight milquetoast session where stocks didn’t move much by the close, but this time they recovered from a morning dip rather than squandering a morning rally.

The NASDAQ rose 0.20% (or approximately 18 points) to a new closing high of 9402.48 as tech continues to show off.

By the way, streaming giant Netflix came roaring back on Thursday with a gain of more than 7%. It was a nice rebound after dipping 3.6% yesterday amid soft U.S. subscriptions and fears of increasing competition. NFLX, which scored 24 Oscar nominations for the upcoming ceremony, was the first FAANG to report this earnings season.

The S&P threatened to give up 3300 today, but it got caught up in the recovery and advanced 0.11% (or nearly 4 points) to 3325.54.

The Dow fell out of bed at the opening bell and plunged by 200 points on fears of the coronavirus. It briefly gave up the 29K milestone. But the index climbed its way back and finished lower by only 0.09% (or about 26 points) to 29,160.09. A 2.8% advance from Boeing was a big help.

One of the major pieces of earnings news on Thursday was chipmaker Intel, which reported solid fourth-quarter numbers after the bell that included a positive earnings surprise and revenue that topped $ 20 billion. Shares of INTC are up more than 6% afterhours (as of this writing).

This shortened week has been pretty mediocre so far, especially when compared to the party we had last week. Nevertheless, the NASDAQ goes into Friday with gains over the previous three days and with a good chance to stretch its winning streak to 7 weeks!

Also, the S&P is only a few points away from being green, though the Dow will need to make up nearly 200 points to get on the plus side. Both indices are going for weekly threepeats.

Today's Portfolio Highlights:

Surprise Trader: The portfolio swapped a couple of banking names on Thursday. Dave sold the underperforming Hancock Whitney (HWC) and replaced it with the addition of Northwest Bancshares (NWBI). This new buy has a positive Earnings ESP of 5.46% for the quarter coming before the bell on Monday, January 27th. Earnings estimates are advancing while the share price has come off its highs, which the editor thinks is a great opportunity. He added NWBI with a 12.5% allocation. Read the full write-up for more.

Technology Innovators: The late October addition of Silicon Motion (SIMO) surely paid off for the portfolio, but this chip stock and supplier for Apple has stopped moving higher. It might even be turning around. Therefore, Brian decided to sell the stock for a 23.7% return in less than three months. The editor immediately replaced the name by adding Domo (DOMO), a Zacks Rank #2 (Buy) enterprise software designer and developer. Read the full write-up for all the specifics on DOMO.

Blockchain Innovators: It’s been all green for Rimini Street (RMNI) since dipping below $ 4 on January 13. This Zacks Rank #2 (Buy) provides enterprise software support services for the education and public sector, so its easy to see why this company would be interested in blockchain technology. Dave wanted to get into this hot stock, which has an earnings growth forecast of nearly 19% for next year and an attractive valuation compared to its industry and the S&P. See the complete commentary for more on this new addition.

Until Tomorrow,
Jim Giaquinto

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