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5 Stocks That Drove Dow ETF Last Week

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After a dismal September, Wall Street regained momentum, registering back-to-back weekly gains.

Most of the gains were attributable to renewed hopes for another fiscal stimulus package being passed by the Congress. A report from the Wall Street Journal stated Treasury Secretary Steven Mnuchin is drafting a proposal worth $1.8 trillion, up from the previous $1.6 trillion offer and closer to the $2.2 trillion package proposed by U.S. House Speaker Nancy Pelosi (read: 5 ETFs Rising as 'Reflation Trade' Picks Up on Stimulus Hope).

Additionally, Democratic challenger Joe Biden’s widening lead in the polls over President Donald Trump is driving the stocks higher. Market speculators believe that if the Democrats take the White House and both chambers of Congress, then fiscal stimulus will be enacted without big delays, which would support stocks and the dollar. The new analysis by FiveThirtyEight revealed about 68% chance of the Democrats winning the Senate as well as holding the House of Representatives, raising the prospects for significant further stimulus.

Notably, the Dow Jones gained 3.3% last week, marking its best weekly performance since Aug 7. Given this, SPDR Dow Jones Industrial Average ETF (DIA - Free Report) tracking the Dow Jones Index has been in the spotlight. Let’s take a closer look at the fundamentals of DIA and its performance.

DIA in Focus

This is one of the largest and most popular ETFs in the large-cap space with AUM of $22.8 billion and average daily volume of 3 million shares. Holding 30 blue chip stocks, the fund is widely spread across components with each holding less than 7.5% share. Information technology (23.5%), healthcare (18.3%), industrials (15.4%), consumer discretionary (14.8%), and financials (12.3%) are the top five sectors. DIA charges 16 basis points (bps) in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: 5 Tech ETFs Driving the Market Rally This Year).   

Though most stocks in the fund’s portfolio were green last week, we have highlighted the five best performing stocks in the ETF that led the way higher with their respective positions in the fund’s basket:

salesforce.com inc. (CRM - Free Report) : The stock has gained 7.3% last week. It saw no earnings estimate revision for this fiscal year (ending January 2021) over the past month and has an expected earnings growth rate of 25.1%. The stock belongs to a top-ranked Zacks industry (top 34%) and takes the third spot in DIA portfolio with 6% exposure. salesforce currently has a Zacks Rank #1 (Strong Buy) and a VGM Score of F. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Travelers Companies Inc. (TRV - Free Report) : This stock makes up for 2.7% allocation and gained 6.7% past week. The stock witnessed negative earnings estimate revision of 26 cents for this year over the past month. It is expected to record year-over-year earnings decline of 13.8%. TRV belongs to a bottom-ranked Zacks industry (bottom 14%). It has a Zacks Rank #5 (Strong Sell) and a VGM Score of B.

Caterpillar Inc. (CAT - Free Report) : This stock takes 3.6% allocation in the fund’s basket and has gained 6% in the same time frame. The stock witnessed no earnings estimate activity for this year over the past month. It is expected to see year-over-year earnings decline of 52.7%. CAT belongs to a bottom-ranked Zacks industry (bottom 11%). It carries a Zacks Rank #3 and has a VGM Score of B (read: 4 Best S&P 500 Sectors of Q3 and Their Top ETFs).

International Business Machines Corporation (IBM - Free Report) : This stock takes 3% allocation in the fund’s basket and climbed 6% last week. The stock witnessed no earnings estimate activity for this year over the past month. It is estimated to record year-over-year earnings decline of 13.7%. IBM belongs to a top-ranked Zacks industry (top 32%). It has a Zacks Rank #3 and a VGM Score of B.

3M Company (MMM - Free Report) : The stock gained 5.6% last week and makes up for 3.9% share in DIA. It has a Zacks Rank #2 (Buy) and VGM Score of B. The company has seen positive earnings estimate revision of 5 cents for this year over the past month. It is expected to witness earnings decline of 8.8%. The stock is part of a top-ranked Zacks industry (top 32%).

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