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4 Stocks to Add to Your Portfolio as Dow Hits All-Time Closing High

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Key Takeaways

  • The Dow closed at 48,254.82, its 17th record high of the year amid optimism over ending the shutdown.
  • Amazon, NVIDIA, JPMorgan, and 3M are highlighted as strong blue-chip stocks for further market gains.
  • All four companies show earnings estimate improvements over the last 60 days, signaling growth momentum.

Investor sentiment got a boost on Wednesday on signs that the government shutdown is about to end, as the House of Representatives geared up to pass the Senate’s spending bill. Also, investors are still hopeful that the Federal Reserve will go for another rate cut in December.

This saw the Dow closing at an all-time high and ending above the 48,000 mark for the first time. Also, the fourth quarter has historically been great for stocks. So, it’s expected that the Dow will give a further boost ahead of and during the holiday season.

Given the positive sentiment, investors should bet on these three fundamentally strong blue-chip stocks, namely Amazon.com, Inc. (AMZN - Free Report) , NVIDIA Corporation (NVDA - Free Report) , JPMorgan Chase & Co. (JPM - Free Report) and 3M Company (MMM - Free Report) .

These companies are well-positioned to benefit from the market’s overall upward trend, offering the potential for solid returns. Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Dow Closes Above 48,000

The Dow rose 0.7% to close at 48,254.82 points on Wednesday, hitting a fresh all-time high. This is the 30-stock index’s 17th record closing high of the year. Wednesday’s rally was primarily driven by optimism surrounding an end to the 43-day-long government shutdown.

The Senate passed a spending bill on Monday, which moved for a final vote from the House of Representatives. Investors have been deprived of key economic data over the past 43 days, which has left them unable to get a clear picture of the economy.

Once the government reopens, investors are expected to get a clear picture of the labor market, which has been a major concern after it showed signs of shrinking over the past few months. Also, inflation data for September and October remained unavailable to investors, which made them unable to assess the Federal Reserve’s future rate cut path.

Also, market participants are still hopeful that the Federal Reserve will go for a quarter percentage point rate cut in December despite hawkish comments from Chairman Jerome Powell. Markets are pricing in a 55.9% chance of a 25 basis point rate cut in December, according to the CME FedWatch Tool.

Despite the uncertainties that prevailed over the past few weeks and a delayed rate cut by the Federal Reserve, the Dow has had a remarkable journey. Tech stocks have been majorly responsible for the broader market rally, but investors have lately been shifting focus to more economically sensitive corners. This is because they have not been at ease with artificial intelligence stocks due to their sky-high valuations.

4 Dow Stocks With Upside

Amazon.com, Inc.

Amazon.com, Inc. is one of the largest e-commerce providers, with sprawling operations in North America, now spreading across the globe. AMZN’s online retail business revolves around the Prime program, well supported by its massive distribution network. Further, the Whole Foods Market acquisition helped Amazon establish a footprint in the physical grocery supermarket space. AMZN also enjoys a dominant position in the cloud-computing market, particularly in the Infrastructure as a Service space, thanks to Amazon Web Services.

Amazon.com has an expected earnings growth rate of 29.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.7% over the last 60 days. AMZN presently carries a Zacks Rank #2.

NVIDIA Corporation

NVIDIA Corporation is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, NVDA’s focus has evolved from PC graphics to AI-based solutions that now support high-performance computing, gaming and virtual reality platforms.

NVIDIA Corporation’s expected earnings growth rate for the current year is 49.2%. The Zacks Consensus Estimate for current-year earnings improved 0.2% over the last 60 days. NVDA presently has a Zacks Rank #2.

JPMorgan Chase & Co.

JPMorgan Chase & Co. is one of the biggest global banks with assets worth $4.09 trillion and stockholders’ equity worth $336.6 billion as of March 31, 2024. With operations in more than 60 countries, JPM is one of the largest financial service firms in the world.

JPMorgan Chase has an expected earnings growth rate of 2.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.8% over the last 60 days. JPM currently carries a Zacks Rank #2.

3M Company 

3M Company, together with its subsidiaries, operates as a diversified technology firm. It has manufacturing operations across the globe and serves a diversified customer base throughout the world. 

3M Company has an expected earnings growth rate of 10.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.4% over the last 60 days. 3M currently carries a Zacks Rank #2.

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