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The S&P 500 wrapped up its best week since Nov 6, climbing 4.6% on renewed optimism in the markets. This is especially true against the backdrop of better-than-expected Q4 earnings and hopes of more stimulus.
Notably, upbeat Q4 earnings have led analysts’ to raise their estimates for the coming quarters. Earnings growth for Q4 has turned modestly positive, following three straight quarters of decline, thanks to impressive results from the tech sector leaders. Meanwhile, the Senate has passed a budget resolution, allowing Congress to continue its quest toward passing a $1.9 trillion coronavirus stimulus bill. The package includes $1,400 stimulus checks, a supplemental jobless benefit, and COVID-19 vaccine and testing funds.
Additionally, a disappointing January jobs report has raised the likelihood of further stimulus. Further, easing of a surge in coronavirus cases and accelerating pace of vaccinations is providing huge support to the S&P 500 (read: Novavax ETFs to Rise on Impressive Coronavirus Vaccine Update).
Against such a backdrop, the proxy version of the S&P 500 Index, SPDR S&P 500 ETF Trust (SPY - Free Report) , also gained 4.8% last week. Let’s take a closer look at the fundamentals of SPY and its best stocks:
Inside the SPY
The ETF holds 505 stocks in its basket with each accounting for no more than 6.7% of assets. This suggests a nice balance across each security and prevents heavy concentration. The fund is widely spread across sectors with information technology, healthcare, consumer discretionary, communication services and financials accounting for a double-digit allocation each. It has AUM of $324.7 billion and charges 9 bps in fees per year. The product trades in heavy volume of around 56 million shares a day on average, ensuring higher liquidity with a tight bid/ask spread, leading to lower trading costs for investors (see: all the Large Cap Blend ETFs here).
SPY has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. Though most stocks in the fund’s portfolio were in the deeper green last week, we have highlighted five stocks that led the rally:
Best-Performing Stocks of SPY
L Brands Inc. : It operates as a specialty retailer of women's intimate and other apparel, personal care, and beauty and home fragrance products. It gained 19.2% last week and saw earnings estimate revision of 4 cents for the fiscal year (ending January 2022). The stock has a Zacks Rank #3 (Hold) and a Growth Score of A.
Under Armour Inc. (UAA - Free Report) : This company is one of the leading designers, marketers and distributors of authentic athletic footwear, apparel, and accessories for a wide variety of sports and fitness activities in the United States and internationally. The stock has gained 16.2% and witnessed no earnings estimate revision for this year over the past week. It has a Zacks Rank #3 (read: Cyclical ETFs in Spotlight on Biden's American Rescue Plan).
Tapestry Inc. (TPR - Free Report) : Formerly known as Coach Inc., it is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. The stock has climbed 16% and saw positive earnings estimate revision of 12 cents over the past week for the fiscal year (ending June 2021). It has a Zacks Rank #1 (Strong Buy) and Growth Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here.
MGM Resorts International (MGM - Free Report) : It is a holding company and primarily owns and operates casino resorts through wholly owned subsidiaries. It jumped 15.9% last week and saw no earnings estimate revision for this year over the past week. MGM Resorts has a Zacks Rank #3 (read: 6 Hot ETFs That Could be Investors' Darling in February).
Align Technology Inc. (ALGN - Free Report) : This company manufactures and markets a system of clear aligner therapy, intra-oral scanners, and CAD/CAM (computer-aided design and computer-aided manufacturing) digital services used in dentistry, orthodontics, and dental records storage. It has jumped 15.6% and saw solid earnings estimate revision of 29 cents over the past week. The stock has a Zacks ETF Rank #2 (Buy).
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5 Stocks That Powered S&P 500 ETF Last Week
The S&P 500 wrapped up its best week since Nov 6, climbing 4.6% on renewed optimism in the markets. This is especially true against the backdrop of better-than-expected Q4 earnings and hopes of more stimulus.
Notably, upbeat Q4 earnings have led analysts’ to raise their estimates for the coming quarters. Earnings growth for Q4 has turned modestly positive, following three straight quarters of decline, thanks to impressive results from the tech sector leaders. Meanwhile, the Senate has passed a budget resolution, allowing Congress to continue its quest toward passing a $1.9 trillion coronavirus stimulus bill. The package includes $1,400 stimulus checks, a supplemental jobless benefit, and COVID-19 vaccine and testing funds.
Additionally, a disappointing January jobs report has raised the likelihood of further stimulus. Further, easing of a surge in coronavirus cases and accelerating pace of vaccinations is providing huge support to the S&P 500 (read: Novavax ETFs to Rise on Impressive Coronavirus Vaccine Update).
Against such a backdrop, the proxy version of the S&P 500 Index, SPDR S&P 500 ETF Trust (SPY - Free Report) , also gained 4.8% last week. Let’s take a closer look at the fundamentals of SPY and its best stocks:
Inside the SPY
The ETF holds 505 stocks in its basket with each accounting for no more than 6.7% of assets. This suggests a nice balance across each security and prevents heavy concentration. The fund is widely spread across sectors with information technology, healthcare, consumer discretionary, communication services and financials accounting for a double-digit allocation each. It has AUM of $324.7 billion and charges 9 bps in fees per year. The product trades in heavy volume of around 56 million shares a day on average, ensuring higher liquidity with a tight bid/ask spread, leading to lower trading costs for investors (see: all the Large Cap Blend ETFs here).
SPY has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. Though most stocks in the fund’s portfolio were in the deeper green last week, we have highlighted five stocks that led the rally:
Best-Performing Stocks of SPY
L Brands Inc. : It operates as a specialty retailer of women's intimate and other apparel, personal care, and beauty and home fragrance products. It gained 19.2% last week and saw earnings estimate revision of 4 cents for the fiscal year (ending January 2022). The stock has a Zacks Rank #3 (Hold) and a Growth Score of A.
Under Armour Inc. (UAA - Free Report) : This company is one of the leading designers, marketers and distributors of authentic athletic footwear, apparel, and accessories for a wide variety of sports and fitness activities in the United States and internationally. The stock has gained 16.2% and witnessed no earnings estimate revision for this year over the past week. It has a Zacks Rank #3 (read: Cyclical ETFs in Spotlight on Biden's American Rescue Plan).
Tapestry Inc. (TPR - Free Report) : Formerly known as Coach Inc., it is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. The stock has climbed 16% and saw positive earnings estimate revision of 12 cents over the past week for the fiscal year (ending June 2021). It has a Zacks Rank #1 (Strong Buy) and Growth Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here.
MGM Resorts International (MGM - Free Report) : It is a holding company and primarily owns and operates casino resorts through wholly owned subsidiaries. It jumped 15.9% last week and saw no earnings estimate revision for this year over the past week. MGM Resorts has a Zacks Rank #3 (read: 6 Hot ETFs That Could be Investors' Darling in February).
Align Technology Inc. (ALGN - Free Report) : This company manufactures and markets a system of clear aligner therapy, intra-oral scanners, and CAD/CAM (computer-aided design and computer-aided manufacturing) digital services used in dentistry, orthodontics, and dental records storage. It has jumped 15.6% and saw solid earnings estimate revision of 29 cents over the past week. The stock has a Zacks ETF Rank #2 (Buy).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>