4 Dow Stocks With Double-Digit Return YTD Despite Pandemic

Wall Street's new bull market that started in mid-April, ending the coronavirus-induced short bear-market, has maintained its momentum in the past three months. After rallying for three months, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — are likely to finish July on a positive note.

However, comparing these three large-cap-centric indexes, the Dow is significantly lagging its peers. Despite the blue-chip index's weak performance so far this year, four out of its 30 components have skyrocketed year to date.

h3 Uneven Performance of Dow So Far in 2020/h3

The Dow ended 2029 at 28,538.44, providing 22.3% return annually. The blue-chip index started 2020 from where it ended last year and recorded its all-time high of 29,568.57 on Feb 12.

However, the index entered into the bear market on Mar 11 with the outbreak of the deadly coronavirus globally. The downward movement continued till Mar 23 as almost all countries, including the United States imposed partial or total lockdowns.

Dow's northbound journey began on Mar 24 and is continuing barring occasional fluctuations. The index jumped an astonishing 51.4% during Mar 23 to Jun 8. However, after Jun 8, the index lost its momentum as the second wave of the coronavirus spiked a large part of the United States. During Jun 9 to Jul 22, the Dow lost 2.1%.

h3 Dow Lags Peers/h3

The Dow ended Jul 22 at 27,005.84, its first closing above 27,000 for the first time since Jun 9. The index is yet to appreciate 5.4% to become green year to date. On the other hand, the broad-market S&P 500 is in positive territory with 1.4% return while the tech-heavy Nasdaq Composite has already skyrocketed 19.3% year to date.

The Nasdaq Composite has posted 28 all-time highs so far this year with the latest recorded at 10,839.93 on Jul 21. The S&P 500 is still 3.5% below its all-time high recorded on Feb 19. Meanwhile, the Dow needs to climb 8.7% to reach its all-time high recorded on Feb 12.

The resurgence of coronavirus has taken a toll on the Dow. Several U.S. states were forced to close some parts of their economies that they reopened in less than a month. Several Dow companies are directly related with the reopening and stabilization of the U.S. economy.

Meanwhile, the technology sector has turned a new safe-haven owing to its inherent strength, coronavirus-led innovations and future growth potential, defying the spread of the deadly virus. That is why the tech-laden Nasdaq Composite is up year to date. Moreover, the six top-performing stocks of the S&P 500 are all tech behemoths.

h3 4 Dow Stocks Flying High /h3

Only nine stocks out of the 30-stock blue-chip index are currently in green year to date. Of the nine, only four stocks have witnessed a double-digit rally so far in 2020. Each of these stocks carries either a Zacks Rank #2 (Buy) 3 (Hold). You can see Zacks Investment Research

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Written By: Zacks Investment Research