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NASDAQ Reaches Record, while Dow and S&P Take a Break

The major indices swapped milestones on the session before Thanksgiving, as the NASDAQ has now made history while the Dow and S&P took a step back.

The tech-heavy index rose 0.48% (or about 57 points) on Wednesday to a new closing record of 12,094.40.

Whenever the market is feeling hopeful that the pandemic’s days are numbered, the NASDAQ underperforms its counterparts as money flows out of “stay home” names and into recovery stocks.

But that wasn’t the case today as this session had to deal with low volume in front of Thanksgiving and another soft jobless claims number.

A lot of investors are taking a break ahead of the holiday… so why shouldn’t the Dow? It was just yesterday that this index closed above 30K for the first time and set a new all-time high. So it’s not a big surprise that it would cool off a bit on the same day that people are preparing for turkey and football.  

The index slipped 0.58% (or about 173 points) to 29,872.47. Likewise, the S&P stepped back by 0.16% to 3629.65 after soaring 1.6% the other day to claim a new record in its own right.

As if the start of the holiday season wasn’t enough for a sluggish session, the week’s rally was also stunted by jobless claims of 778,000 last week. That’s another reading that was more than expectations and the previous report.

Such news reminds the market that we’re not in the clear yet. The vaccine data has been fantastic in the past three weeks, but the rise in new cases is keeping investors nervous.

But here’s something positive. The major indices go into the final session of the week (or final half-session actually) with gains of approximately 2% each. And the totals for the month, thus far, are even better.

Today’s Portfolio Highlights:

Home Run Investor: With an average earnings surprise of 278% over the past four quarters, it’s no wonder why Brian was interested in adding Merit Medical Systems (MMSI). The company sells disposable medical devices that are used in interventional, diagnostic and therapeutic procedures. In its most recent quarter, the surprise came to 121%. Furthermore, rising earnings estimates have made MMSI a Zacks Rank #2 (Buy). The editor expects this stock to gain some real momentum as its margins improve. Read the full write-up for more.

Surprise Trader: The holiday season begins with Thanksgiving tomorrow, and then it’s time to start shopping for Christmas. You know what’s always a great gift for someone special? Jewelry! So Dave is buying Signet Jewelers (SIG) at just the right time. This Zacks Rank #2 (Buy) beat by more than 45% last time, and now has an Earnings ESP of 13.95% for the quarter coming before the bell on Thursday, December 3. The editor added SIG on Wednesday with a 12.5% allocation, while also getting out of Teekay LNG Partners (TGP, +3%). See the complete commentary for more.

Counterstrike: “While it will be a half day, I think we could see some silly moves on Friday, so don’t ignore it. I have 3670 targets on the S&P that should be hit early next week and 3736 targets that should be seen by the end of the year.

“While this seems very bullish, I’m starting to notice some stocks overextending and certain sectors starting to really get to absurd levels.

“A couple stocks have stuck out as shorting opportunities, but I’m not ready yet. I’m going to dig more over the holiday weekend and look for more opportunities on the short side. But don’t worry, I still have my list of longs, so those that don’t like to short will get some picks coming soon.” — Jeremy Mullin

Happy Thanksgiving!
Jim Giaquinto

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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