Dow Passes 25K As Banks Take The Lead

Remember, the June episode of the Zacks Ultimate Strategy Session is now available for viewing! Don't miss your chance to hear:

• Sheraz Mian and Kevin Cook Agree to Disagree on how impactful the 3 biggest threats to the economy and stock market will be
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• Market conditions from both fundamental and technical views
• The full list of top-performing stocks over the past 30 days
• New stocks added to the ZU portfolio
• And much more

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Tech had another solid session on Wednesday, but the banks had an even better one.

As a result, the Dow went from worst to first, jumping 1.4% (or about 346 points) to 25,146.4. Yesterday, the index was the only one of the Big 3 that finished in the red. The 10-year Treasury note rose on Wednesday but stayed below 3%, leading to a strong day for big guys like Bank of America (NYSE:BAC) (+3.2%), J.P. Morgan (+2.3%), Morgan Stanley (NYSE:MS) (+2.2%), and Goldman Sachs (NYSE:GS) (+1.7%).

The NASDAQ's strong performances continued with a rise of 0.67% to 7689.2. The index might have taken a break from leading the market, but it still hit a new all-time high for a third straight session. The Russell 2000 kept pace as the small-cap index rose 0.68% for a third straight record close at nearly 1676. The S&P was up 6% to 2772.4.

In the portfolios, Home Run Investor took a double-digit profit to open a space for a new buy, while Options Trader bought more time for a fund that's finally on positive ground. Meanwhile, Dave added to both Momentum Trader and Surprise Trader. Learn more about today's moves in the highlights section below:

Today's Portfolio Highlights:

Home Run Investor: The portfolio is fully invested right now, so Brian Bolan needs to sell a stock and make room before buying something new. On Wednesday, he decided to bank the more than 18% profit in Echo Logistics (ECHO). The new buy filling this spot is Carbonite (CARB), a computer service company that provides online back up solutions. It recently reported a solid beat and raise quarter while issuing an outlook for next quarter that was above expectations. Get a lot more specifics on this new pick in the complete commentary.

Momentum Trader: Taking a look at the chart of Cannae Holdings (CNNE), Dave sees a run-up to highs followed by a textbook pullback to the 50-day moving average that was then met with renewed buying. The editor calls this “old school Momentum Trader stuff”. So what’s the next move? He expects a run to fresh 52-week highs. Therefore, the portfolio added this Zacks Rank #2 (Buy) principal investment firm on Wednesday with a 12.5% allocation. Read the complete commentary for more.

Options Trader: Retail ETF (XRT) has finally come to life for the portfolio, but now there’s only 9 days left until expiration. If the price slips below $46 by next Friday, it would wipe out any gain. Kevin needs more staying power, so he sold to close the 2 June 46.00 Calls and immediately repositioned for more time by buying to open 3 December 49.00 Calls. Now there are 198 days of time left. If this move seems familiar, it’s pretty much the same scenario used with CME on Monday. Get more specifics in the complete write-up.

Surprise Trader: In a classic “bet the jockey, not the horse” move, Dave added Restoration Hardware (RH) on Wednesday with a 12.5% allocation. What does that mean? It means the editor is really betting on Gary Friedman, the company’s Chairman & CEO who is a “mythical character in the retail world” with very loyal investors. RH is also a Zacks Rank #2 (Buy) with a positive Earnings ESP for the quarter coming next Monday, June 11th. See the full write-up for more.

Counterstrike: "Big green day on wall street as the S&P finally broke loose and shot up above the 2750 resistance area. The big clue over the last couple day were the big momentum stocks started gaining steam. When they continued higher today, other stocks had no choice but to follow. The S&P finally outpaced the Nasdaq with a 0.86% gain vs a 0.60% gain. This brought the S&P to the highest level since late March.

"Technically and fundamentally things look great. The biggest risk were the headlines that we were getting out of Washington, but it seems like the market has become immune as of late. The S&P has now broken out of a wedge and broken a Fib short setup, giving us targets of 2970. I would not be surprised to see that number at the end of the year." -- Jeremy Mullin

All the Best,
Jim Giaquinto