Dow Heads Toward 29,000: Grab 5 Blue-Chip Stocks Now

In the past couple of months, the Dow has had a superb run, with the blue-chip index hitting another record high on Jan 9. The index gained 211.81 points, or 0.7%, to close at 28,956.90 after touching an intraday high of 28,988.01. Thus, the index is tantalizingly close to another psychological milestone of 29,000. The Dow had steered past the coveted 28,000 mark for the first time in its 120-year history on Nov 15.

Some may say that round figures like 29,000 aren’t necessarily significant for the stock market but let’s admit it does reflect growing upbeat sentiment. And the latest Dow rally comes after the United States and Iran refrained from further military aggression.

U.S. President Trump had given clear indication that there won’t be any U.S. military strikes following an Iranian missile attack on U.S. bases in Iraq. Trump had announced that the missile strikes resulted in little damage and no American lives were lost. Instead, he endorsed less lethal tools to prevent Iran from acquiring a nuclear weapon. He ordered additional economic sanctions against Iran as well.

By the way, news that China’s top trade negotiator, Vice Premier Liu He would travel to the United States to sign the “phase one” partial deal helped the blue-chip index climb north. Positive developments on the trade front have always been a market driver because Trump’s imposition of import tariffs has always slowed down global economic growth.

As Dow bulls regained confidence in the geopolitical outlook, the solid state of the domestic economy boosted investors’ sentiment. The latest ADP (NASDAQ:ADP) report on nonfarm employment was literally impressive. The report stated that the domestic economy breached the 200,000 level in job creations and smashed forecasts by 42,000 jobs.

In fact, the U.S. economy continues to hold ground, displaying outstanding resilience. After all, consumer spending has increased significantly and consumers are now more confident about their well-being. And as consumer outlays remain healthy, led by record low unemployment rate, investors certainly expect the economy to continue expanding this year as well.

5 Blue-Chip Stocks to Buy Now

Thanks to the aforementioned bullish factors, there has been a particularly sharp run-up in the 120-year-old index of 30 stocks. These companies are slated to gain in the near term as they have strong balance sheet and solid cash flow. Hence, it makes sense to invest in solid blue-chip stocks that can make the most of a Dow rally. We have, thus, selected five such blue-chip stocks that have a Zacks Rank #2 (Buy). You can see Zacks Investment Research

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Written By: Zacks Investment Research