Dow Reclaims 25K, Nasdaq Hits New High as Tech and Retail Shine

First Solar stock was one of this week's biggest losers

Jun 8, 2018 at 2:40 PM
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U.S. stocks powered higher this week, despite lingering uncertainty around global trade. The tech sector got the ball rolling early in the week, as FAANG stocks such as Apple (AAPL) and Netflix (NFLX) rallied to all-time highs, a big reason the Nasdaq Composite (IXIC) rattled off three straight record closes. When tech cooled some later in the week, retail and financial stocks stepped up, and now all three major equity benchmarks are pacing for weekly wins.

Dow Surpasses 25K

The Dow Jones Industrial Average (DJI) is set for a third straight win, despite jitters surrounding the G-7 summit, as the blue-chip index seems to have at least momentarily made a meaningful move above the 25,000 level. Aside from the strength out of tech and bank stocks, the Dow benefited from a huge Thursday session out of McDonald's (MCD), with the blue chip rallying on reports of a potential round of layoffs. Elsewhere, these other two Dow components are flirting with key market caps.

Analysts Make Big Calls on Drug Stocks

Shifting from large-cap to some small-cap stocks, a number of little-known healthcare names were thrown into the spotlight this week. These three drug stocks made monster moves early in the week, but that was just the beginning. On Thursday, a couple penny stocks popped on new collaborations, while a number of other biotechs jumped thanks to ambitious updates from analysts. For example, one firm predicted this drugmaker will rally more than 300%, while this gene therapy name could apparently jump 90%, and Wall Street kept up its love affair with red-hot Marinus Pharmaceuticals (MRNS).

As for some losers out of the healthcare space, MiMedx (MDXG) announced it's reinstating financial results from recent years, and Nektar Therapeutics (NKTR) had its worst day in years. Amgen (AMGN), meanwhile, sank on Mylan's (MYL) big FDA approval, and layoff rumors weighed on Novo Nordisk (NVO). Elsewhere, this healthcare real estate firm was accused of manipulating numbers.

Macy's, Under Armour Headline Retail Resurgence

The retail sector has been making a dramatic comeback, and two of the biggest winners have been Macy's (M) and Under Armour (UAA). Both stocks rallied to fresh highs this week, but Macy's options traders have actually been bearish. Under Armour, on the other hand, saw substantial call buying. Foot Locker (FL) and Five Below (FIVE) also hit new highs of their own, but Tapestry (TPR) pulled back on the tragic news of Kate Spade's death.

In the digital space, Amazon (AMZN) was again in focus thanks to reports the company could offer yet another new service, and these fellow e-commerce stocks kept outperforming. Wall Street newcomer Stitch Fix (SFIX) may have stolen the show, however, as some believe it's "revolutionizing fashion."

First Solar Stock Gets Demolished

Turning to the energy sector, oil-and-gas stocks had been all the rage coming into this week, but the focus quickly shifted to renewables following China's decision to place restrictive measures on solar projects. The most notable loser was First Solar (FSLR) stock, which got drilled as several analysts slashed their outlooks.

As for traditional energy stocks, analysts and options traders love lesser-known Encana (ECA), while this other energy stock could be ready to bounce. In the options pits, one bull bet $1.6 million on an oil rebound. Shifting gears to the mining sector, Cleveland-Cliffs (CLF) keeps climbing, and in the steel space, U.S. Steel (X) gave a promising outlook.

Stocks to Watch During Fed Week

Aside from Tuesday's meeting between President Donald Trump and North Korea's Kim Jong Un, next week's schedule centers around the Federal Open Market Committee (FOMC) meeting. While it's widely expected that the central bank will raise interest rates, we've highlighted a number of ways to trade the event. For example, bulls may want to consider these stocks ahead of a rate hike, and these bank stocks should be avoided. Fed meeting aside, rising optimism from investors could suggest near-term headwinds are on the way.

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