Dow's Winning Streak Ends As Stocks Take A Break

After five days in the green, it was time for the Dow to take a little break. The index declined 0.53% (or about 135 points) on Thursday to 25,064.5. It was the first slip since the 220-point drop on Wednesday, July 11 and marked only the second down day since July 4.

The S&P dipped by 0.40% but managed to stay above 2800 at 2804.5. The NASDAQ was down 0.37% to 7825.3. The Russell 2000, though, advanced 0.56% to 1701.3.

The banks were a major reason for yesterday’s rally, but today they were duds. In fact, Wednesday’s big winners were among Thursday’s big losers, including Morgan Stanley (NYSE:MS) (-1.4%), JPMorgan (NYSE:JPM) (-1.47%) and Bank of America (NYSE:BAC) (-1.53%).

In addition, a few of the reports after the bell yesterday were beaten up pretty good in the session. eBay plunged more than 10% on a weak guidance while American Express (NYSE:AXP) dipped 2.73%. However, shares of IBM (NYSE:IBM) increased nearly 3.3% after a largely in-line quarter last night.

Apart from earnings season, the big news today was President Trump criticizing Fed Chair Jerome Powell in a CNBC interview. POTUS said he wasn’t thrilled with the Fed raising rates, which breaks long-standing tradition that a sitting president shouldn’t be so frank with the Fed. The statement certainly had an impact once the media got a hold of it, but it wasn’t a significant reason for today’s market slump.

In the portfolios, Dave accounted for almost all of the action. The editor added in all three of his services, replacing positions in Blockchain Innovators and Surprise Trader while picking up another inexpensive stock in Momentum Trader. The largest profit today came out of Insider Trader, which sold half of an E&P company for a triple-digit return! Read the highlights section below for more:

Today's Portfolio Highlights:

Blockchain Innovators: Crypto has been gaining momentum again recently, so Dave feels comfortable enough to add a little more beta to the portfolio. On Thursday, he picked up Wipro (WIT), a consulting firm that specializes in blockchain. The stock has bounced off $4.60 and is now moving higher heading into its quarterly report tomorrow. This move replaces Gain Capital (GCAP), which the editor sold for a more than 1% return after slipping all the way to a Zacks Rank #5 (Strong Sell). Read the complete commentary for more on these moves.

Insider Trader: Crude has been trending higher for a while now, which has sent small-cap E&P Lonestar (LONE) on an “insane, amazing ride”. Since these stocks can be very volatile, Tracey decided to sell half of the current position for an impressive 115% return and let the rest ride into its early August earnings report. Back in late May, the editor sold half of the original position for a profit of nearly 28%. Learn more in the complete commentary.

Surprise Trader: The building products – wood industry is in the top 4% of the Zacks Industry Rank with the 11th spot out of 256. Boise Cascade (BCC) is one of the big names in this space, and Dave sees signs that a good report is coming one week from today. First of all, it has a huge positive Earnings ESP of 14.97 for the upcoming announcement. Plus, BCC beat by an impressive 108% last time. The editor bought the stock on Thursday to replace the sale of Mellanox (MLNX). Read the full write-up for more.

Momentum Trader: The portfolio has been very successful with stocks in the low double-digits. Dave is hoping for more of the same with today’s addition of Elevate Credit (ELVT), which offers online credit solutions to non-prime customers. After jumping to more than $11 from under $8, the stock has slipped back to the low $10s. The editor sees this as a “nice little setup”, so he put the portfolio’s remaining cash into ELVT after selling ChemoCentryx (CCXI) for a 3.7% return. Read the complete commentary for more.

Good Evening,
Jim Giaquinto