NASDAQ Jumps 1.8% as Stocks End Three-Day Slump

The market finally enjoyed its first green session of the week on Thursday… and it was good old technology that led the way higher. Another encouraging jobless claims report also helped to grease the wheels a bit.

The NASDAQ jumped 1.77% (or 236 points exactly) today to 13,535.74. It’s on a four-week losing streak, but goes into Friday’s session as the only major index on positive ground for the week. In fact, it’s up nearly 1% through the first four days.

A grind higher in the cryptocurrency markets provided an assist on Thursday. Bitcoin plunged to around $30K at one point yesterday, which marked a 50% drop from recent highs. However, it’s back above $40K. Though it looks like the Treasury Department has some regulatory measures in mind, such as alerting the IRS to any transfers over $10,000.

“The markets popped today after the crypto bonanza yesterday. Many individual stocks held up key support levels at the depths of yesterday’s Bitcoin-driven sell-off. This was the bullish signal that buyers needed to put some of that sidelined cash to work today,” said Dan Laboe in today’s Headline Trader.

Big tech had a great session, especially Netflix (NASDAQ:NFLX, +2.9%), Apple (NASDAQ:AAPL, +2.1%) and Alphabet (NASDAQ:GOOGL) (GOOG, +2.05%). Meanwhile, Facebook (NASDAQ:FB) and Microsoft (NASDAQ:MSFT) were also each up by more than 1%.

Elsewhere, the S&P rose 1.06% to 4159.12, while the Dow advanced 0.55% (or around 188 points) to 34,084.15. These indices are down about 0.4% and 0.9% for the week, respectively, heading into Friday.

However, all three indices snapped a three-day losing streak!

And here’s something we’ll never get tired of hearing: jobless claims hit another pandemic low with ‘only’ 444,000 last week. The result beat expectations at a little more than 450K and was the third straight week below 500K.

Today's Portfolio Highlights:

Technology Innovators: The next few months should see the end of this chip shortage, according to Brian. Therefore, now is the time to raise the portfolio’s chip exposure, which is why he picked up Silicon Motion (NASDAQ:SIMO) on Thursday. Specifically, the company is a leading developer of microcontroller ICs for NAND flash storage devices. It has beaten the Zacks Consensus Estimate in each of the last four quarters with an average surprise of 14% over that time. Rising earnings estimates made SIMO a Zacks Rank #1 (Strong Buy). Furthermore, the topline is expected to grow 55% this year, while its valuation is very low for the chip space. In addition to buying SIMO, the editor also sold the underperforming Upland Software (NASDAQ:UPLD) position. Read the full write-up for more on today’s moves.

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Insider Trader: It’s always extra bullish when an insider buys shares of a company that’s already moving higher. Tracey bought two such names on Thursday. Firstly, CalAmp (CAMP) is a small-cap software technology solutions company that’s up more than 33% year to date. Nevertheless, the CEO and a director bought shares in the past week. Meanwhile, Matador Resources (NYSE:MTDR) is an E&P that’s up 133% so far in 2021. Even though the company is at two-year highs, the COO-Operations and a director bought shares earlier this month. The editor added CAMP and MTDR today with 10% positions in each. The portfolio also sold Bed Bath & Beyond (BBBY) after reaching Tracey’s “threshold of pain on this industry-wide weakness”. Read the full write-up for a lot more on today’s moves, including a deeper look on the potential catalysts for MTDR and the larger energy space.

Surprise Trader: It’s all about retailers here in the final days of earnings season, and Dave went to the luxury end of the space with Thursday’s addition of Capri Holdings (NYSE:CPRI). The company formerly known as Michael Kors has expanded recently with acquisitions of Versace and Jimmy Choo. And now it will be going for a fourth straight positive surprise when reporting before the bell on Wednesday, May 26. This Zacks Rank #2 (Buy) topped by more than 58% last time and has a “staggering” positive Earnings ESP for the upcoming report. The editor added CPRI today with a 12.5% allocation, while also getting out of Gildan (GIL) for a basically breakeven move. Read the complete commentary for more on today’s action.

Home Run Investor: The biggest winner of the day among all ZU names came from this portfolio, as cosmetic laser company Cutera (NASDAQ:CUTR) jumped 12.1%. A couple weeks ago, CUTR reported a solid first quarter report, which included a positive earnings surprise of more than 193% and a revenue beat of over 25%. The company was added back on March 10. By the way, Everi Holdings (NYSE:EVRI) also made the top 5 on Thursday by climbing 8.25%, and is among the biggest winners over the past 30 days with a surge of 40%.

Until Tomorrow,
Jim Giaquinto

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Written By: Zacks Investment Research