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5 Dow Stocks Stand Tall Despite Index's Loss of 2018 Gains
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After tranquil trading in 2017, the Dow Jones Industrial Average (“DJI”) has been a bit volatile in 2018. Since the beginning of the year, the index gained almost 9% to reach a high of 26,951.81 on Oct 3. However, the upside was checked when the index lost momentum, thanks to domestic and global issues that plagued the market. We note that the index has lost approximately 0.8% year to date. Currently, as many as 13 of the 30 blue-chip stocks are struggling on the bourses.
Well, the market underwent several downturns this year, with majority of the bruises caused by trade tensions between the United States and China. Tariff strains between these nations have weighed on growth prospects of some major companies. Tech stocks caught in the crossfire between the two countries are likely to witness persistent negative impacts despite recent attempts at a resolution. President Trump’s tough polices have disrupted their supply chain. Energy stocks have also arrested the index’s momentum, as they were under pressure by fall in oil prices, stemming from an oversupply situation.
The market also witnessed interest rate hikes this year, primarily due to a strong economic background. A rise in interest rate raises consumers’ borrowing costs, which makes loans and mortgages expensive. Interest rates were raised three times this year by the Federal Reserve. There are speculations that another hike is imminent this month, which will further tighten financial conditions.
Cumulatively, these led to a drab investment scenario and brewed concerns regarding an economic slowdown. According to a CNBC article on Dec 4, the Dow Jones Industrial Average shed almost 800 points during the day’s trading session. This marks as the index’s worst plunge since October.
Are There Any Rays of Hope?
Certainly, the stock market continues to be volatile but the underlying economic fundamental looks stable. The third-quarter GDP advanced at an annualized rate of 3.5%. Incidentally, Trump’s tax reform policies have been boosting corporate spending. This has raised productivity for several industries and fueled the overall economy.
Moreover, consumer spending continues to be strong, increasing almost 4% in the quarter. Low unemployment levels and rising wages have uplifted consumers’ sentiment.
Moreover, if we take cues from history, the stock market usually bounces back to the green zone when Christmas season is around the corner. Investors can utilize this opportunity to cash in on some lucrative picks. Despite overall weakness, 17 out of the 30 Dow stocks are faring favorably so far this year.
Our Top Picks
We have zeroed in on five stocks from the Dow portfolio that have yielded on a year-to-date basis and hold substantial growth potentials. While one stock flaunts a Zacks Rank #1 (Strong Buy) the others carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intel Corporation (INTC - Free Report) : The stock from the technology sector, sporting a Zacks Rank #1, has returned 6.2% so far in the year. Moreover, the company’s earnings have surpassed the Zacks Consensus Estimate in the trailing four quarters, the average being 18.7%. Additionally, estimates for the current year depict a growth of almost 31%.
The Boeing Company (BA - Free Report) : The aerospace giant’s earnings have surpassed the Zacks Consensus Estimates in the trailing four quarters, the average being 28%. The Zacks Consensus Estimate for the current year depicts a rally of almost 25% and has improved in the past 30 days. On a year-to-date basis, the stock has returned 12.9%.
Johnson & Johnson (JNJ - Free Report) : This predominant player in the healthcare space has returned close to 8.3% so far in the year. The company has a positive earnings surprise of 1.7% in the trailing four quarters. The Zacks Consensus Estimate for the current year depicts an advancement of 11.7% and has been stable in the past 30 days.
Merck & Co., Inc. (MRK - Free Report) : The company generated positive earnings surprise of 2.6% in the third quarter. In the trailing four quarters the company delivered average positive earnings surprise of 4%. The Zacks Consensus Estimate for the current year depicts a growth of almost 9%. Notably, shares of this renowned healthcare company have returned as much as 42% year to date.
American Express Company (AXP - Free Report) : This financial services company’s shares have gained 9.8% on a year-to-date basis. The Zacks Consensus Estimate for the current year depicts an improvement of almost 25.8%. The same has improved slightly in the past 30 days. We note that bottom-line results of the company have surpassed estimates by an average of 4.4% in the trailing four quarters.
In addition to the stocks discussed above, would you like to know about our 10 top tickers to buy and hold for the entirety of 2019?
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5 Dow Stocks Stand Tall Despite Index's Loss of 2018 Gains
After tranquil trading in 2017, the Dow Jones Industrial Average (“DJI”) has been a bit volatile in 2018. Since the beginning of the year, the index gained almost 9% to reach a high of 26,951.81 on Oct 3. However, the upside was checked when the index lost momentum, thanks to domestic and global issues that plagued the market. We note that the index has lost approximately 0.8% year to date. Currently, as many as 13 of the 30 blue-chip stocks are struggling on the bourses.
Well, the market underwent several downturns this year, with majority of the bruises caused by trade tensions between the United States and China. Tariff strains between these nations have weighed on growth prospects of some major companies. Tech stocks caught in the crossfire between the two countries are likely to witness persistent negative impacts despite recent attempts at a resolution. President Trump’s tough polices have disrupted their supply chain. Energy stocks have also arrested the index’s momentum, as they were under pressure by fall in oil prices, stemming from an oversupply situation.
The market also witnessed interest rate hikes this year, primarily due to a strong economic background. A rise in interest rate raises consumers’ borrowing costs, which makes loans and mortgages expensive. Interest rates were raised three times this year by the Federal Reserve. There are speculations that another hike is imminent this month, which will further tighten financial conditions.
Cumulatively, these led to a drab investment scenario and brewed concerns regarding an economic slowdown. According to a CNBC article on Dec 4, the Dow Jones Industrial Average shed almost 800 points during the day’s trading session. This marks as the index’s worst plunge since October.
Are There Any Rays of Hope?
Certainly, the stock market continues to be volatile but the underlying economic fundamental looks stable. The third-quarter GDP advanced at an annualized rate of 3.5%. Incidentally, Trump’s tax reform policies have been boosting corporate spending. This has raised productivity for several industries and fueled the overall economy.
Moreover, consumer spending continues to be strong, increasing almost 4% in the quarter. Low unemployment levels and rising wages have uplifted consumers’ sentiment.
Moreover, if we take cues from history, the stock market usually bounces back to the green zone when Christmas season is around the corner. Investors can utilize this opportunity to cash in on some lucrative picks. Despite overall weakness, 17 out of the 30 Dow stocks are faring favorably so far this year.
Our Top Picks
We have zeroed in on five stocks from the Dow portfolio that have yielded on a year-to-date basis and hold substantial growth potentials. While one stock flaunts a Zacks Rank #1 (Strong Buy) the others carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intel Corporation (INTC - Free Report) : The stock from the technology sector, sporting a Zacks Rank #1, has returned 6.2% so far in the year. Moreover, the company’s earnings have surpassed the Zacks Consensus Estimate in the trailing four quarters, the average being 18.7%. Additionally, estimates for the current year depict a growth of almost 31%.
The Boeing Company (BA - Free Report) : The aerospace giant’s earnings have surpassed the Zacks Consensus Estimates in the trailing four quarters, the average being 28%. The Zacks Consensus Estimate for the current year depicts a rally of almost 25% and has improved in the past 30 days. On a year-to-date basis, the stock has returned 12.9%.
Johnson & Johnson (JNJ - Free Report) : This predominant player in the healthcare space has returned close to 8.3% so far in the year. The company has a positive earnings surprise of 1.7% in the trailing four quarters. The Zacks Consensus Estimate for the current year depicts an advancement of 11.7% and has been stable in the past 30 days.
Merck & Co., Inc. (MRK - Free Report) : The company generated positive earnings surprise of 2.6% in the third quarter. In the trailing four quarters the company delivered average positive earnings surprise of 4%. The Zacks Consensus Estimate for the current year depicts a growth of almost 9%. Notably, shares of this renowned healthcare company have returned as much as 42% year to date.
American Express Company (AXP - Free Report) : This financial services company’s shares have gained 9.8% on a year-to-date basis. The Zacks Consensus Estimate for the current year depicts an improvement of almost 25.8%. The same has improved slightly in the past 30 days. We note that bottom-line results of the company have surpassed estimates by an average of 4.4% in the trailing four quarters.
In addition to the stocks discussed above, would you like to know about our 10 top tickers to buy and hold for the entirety of 2019?
These 10 are painstakingly handpicked from over 4,000 companies covered by the Zacks Rank. They are our primary picks poised to outperform in the year ahead. Be among the first to see the new Zacks Top 10 Stocks >>