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The NASDAQ’s six-day winning streak ended on Tuesday, as the major indices pulled back sharply in the second half after more than a week of strong performances.

The market had a flat opening to the session, but its been primed to take a step back and the recently ebullient tech sector couldn’t stop it.

The NASDAQ led the way lower with a decline of 2.06% (or nearly 190 points) to 9002.55. The drop wiped out a little less than a third of what was gained in the previous six sessions, but the index is still well over 1% in the green for 2020.

It’s easy to see why this happened. The FAANGs, which were the trailblazers over the past week, all moved sharply lower on Tuesday. The biggest loser was Amazon (AMZN, -2.2%), while Netflix (NFLX) and Alphabet (GOOG) also dropped by about 2%. Meanwhile, Microsoft (MSFT) was down nearly 2.3% as well.

The S&P dropped by 2.05% to 2870.12, while the Dow slipped 1.89% (or around 457 points) to 23,764.78.

The media talked about stocks taking a step back due to nervousness with parts of the economy re-opening, which was exacerbated when Dr. Anthony Fauci stated, remotely, to Congress that things could get even worse if states get back to business prematurely.

However, we already knew that re-opening without a vaccine carried risk. Plus, we’ve been hearing about the market being overheated throughout the recent upsurge, especially in the face of several difficult-to-take jobs reports.

So, this break for the market was probably necessary as we wait for more details on medical advancements and the result of easing stay-at-home orders in sections of the country.

The big news tomorrow, barring any surprises, will be comments from Fed Chair Jerome Powell. His comments could play a part in whether today’s pullback is a change in course to the market’s recent optimism or just a pause before the next move higher.

Today’s Portfolio Highlights:

Income Investor: Home projects are soaring right now as people try to stave off cabin fever during this shutdown. So there’s no wonder why Home Depot (HD) jumped nearly 18% last month. It’s also no surprise that Maddy would add this home improvement giant to this portfolio, especially with a dividend that yields about 2.5% right now amid 11 straight years of payouts. But that’s not all. The editor also added Innovative Industrial Properties (IIPR), which buys industrial properties and sells them to marijuana businesses in states where its allowed. It has already acquired nine properties this year. Thanks to REIT rules, the company has doubled its dividend yield over the past year to 5%. Read the full write-up for a lot more on today’s moves.

Stocks Under $10: While the market took a sharp dive late in the session, shares of Asure Software (ASUR) just kept moving higher and finished with a gain of more than 9%. Brian really likes that resiliency, so he added this Zacks Rank #2 (Buy) provider of  Web-based workforce management solutions on Tuesday. The stock is also going against the grain with earnings estimates for this quarter and next, as analysts have raised even though negative revisions are sweeping the market. The editor appreciates that ASUR has topped expectations in three of its past four quarters. To make room for this new addition, he sold Camtek (CAMT) for a nice gain of nearly 30% in just about two months. Read the full write-up for more on today’s moves. By the way, this portfolio had the biggest winner of the day among all ZU names as PharmAthene (ALT) jumped 17.5%.

Surprise Trader: The ‘stay home’ stocks have been performing well for this portfolio, such as the strong report yesterday from mattress maker Purple Innovation (PRPL). (That stock was added last Friday and is already up more than 9% in the portfolio.) Dave added another ‘new economy’ name on Tuesday with a 12.5% allocation in Autohome (ATHM), which operates consumer automobile websites. The company is part of the Internet-Services space, which is in the Top 11% of the Zacks Industry Rank. ATHM has a positive Earnings ESP of 1.99% for a quarter that should be coming very soon. The editor also sold Radius Health (RDUS) today. See the complete commentary for more on all this action.

Zacks Short List: The portfolio swapped out two names in this week’s adjustment. The stocks that were short-covered include Tesla (TSLA) and Yandex NV (YNDX). The new buys that filled these open positions were Advanced Disposal Services (ADSW) and Aptiv Plc (APTV). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.

Until Tomorrow,
Jim Giaquinto

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