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Dow Tops 30,000: 5 Stocks Driving the ETF

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The Dow Jones Industrial Average topped the 30,000 milestone for the first time on vaccine optimism, and improving prospects for the smooth transition of President-elect Joe Biden to White House.

The latest data suggests that a COVID-19 vaccine, which could put an end to the coronavirus pandemic, would be available before the end of this year, based on promising trial results released by Pfizer (PFE - Free Report) , Moderna (MRNA - Free Report) and AstraZeneca (AZN - Free Report) (read: Spread of Top-Ranked Value ETFs to Bet on Vaccine Optimism).

Additionally, trillions of dollars in stimulus from the U.S. central bank and government powered the index. The Fed has slashed short-term interest rates back to roughly zero and taken other measures to stabilize the financial markets. Further, the economy is showing signs of improvement with business activity in November expanding at the fastest rate in more than five years.

The journey to 30,000 from the 20,000-mark took less than four years, a much faster increase than the previous 10,000-point rise, which took nearly two decades. The rise from 29,000 to 30,000 took the Dow about 10 months. Meanwhile, the index made the fastest bear market recovery in 30 years last week, as it took 1,483 trading days to carve out a new all-time high after hitting a bear market, per Dow Jones Market Data. The Dow Jones is up about 60% since its Mar 23 bear market.

Given this, SPDR Dow Jones Industrial Average ETF (DIA - Free Report) tracking the Dow Jones Index has been in the spotlight (read: Small Caps at the Forefront of Market Rally: 5 ETF Winners).

Let’s take a closer look at the fundamentals of DIA and its performance.

DIA in Focus

This is one of the largest and the most popular ETFs in the large-cap space with AUM of $24.7 billion and average daily volume of 3.5 million shares. Holding 30 blue chip stocks, the fund is widely spread across components with each holding less than 7.5% share. Information technology (22.2%), healthcare (17.4%), industrials (17%), consumer discretionary (13.8%) and financials (13.3%), and are the top five sectors. DIA charges 16 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.   

Though most stocks in the fund’s portfolio have been moving north so far this year, 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 60.4% this year. 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 24.7%. The stock belongs to a bottom-ranked Zacks industry (bottom 33%) and takes the third spot in the DIA portfolio with 5.7% exposure. Salesforce.com currently has a Zacks Rank #3 (Hold) and a Growth Score of B.

Apple Inc. (AAPL - Free Report) : The stock has rallied about 56.9% so far this year. It saw no earnings estimate revision over the past 30 days for the fiscal year (ending September 2021) and its earnings are expected to increase 22.3% year over year. Apple currently has a Zacks Rank #3 and a Growth Score of B. The stock falls under a Zacks industry (top 30%) and makes up for 2.5% exposure in DIA.

Microsoft Corporation (MSFT - Free Report) : The stock has jumped 35.6% this year and takes the eighth spot in the fund’s basket with 4.7% share. It saw solid earnings estimate revision of 37 cents over the past 30 days for fiscal year (ending Jun 2021) and has an expected earnings growth rate of 16.8%. The company has a Zacks Rank #2 and an unimpressive Growth Score of C. However, it belongs to a bottom-ranked Zacks industry (bottom 33%). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

NIKE Inc. (NKE - Free Report) : The stock has surged 33% so far this year and accounts for 3% share in DIA. It has a Zacks Rank #3 and has a Growth Score of B. The company has seen negative earnings estimate revision of a penny for the fiscal year (ending May 2021) over the past month and has an expected earnings growth rate of 76.2%. The stock is part of a top-ranked Zacks industry (top 28%).

Walmart Inc. (WMT - Free Report) : This stock accounts for 3.3% of the assets in the fund’s basket and has gained 27.4% so far this year. It has witnessed solid earnings estimate revision of 19 cents over the past 30 days for fiscal year (ending Jan 2021). Its earnings are expected to increase 12.4% from last year. Walmart has a Zacks Rank #3 and a Growth Score of A. It belongs to a favorable Zacks industry (placed at the top 22% of 250+ industries) (read: Solid Q3 Earnings Drive Retail ETFs Higher).

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