5 Top-Ranked Stocks Powering S&P 500's Fastest-Ever Recovery

The S&P 500 closed the Aug 18 trading session at new record highs for the first time since Feb 19. After this, the outbreak of the COVID-19 pandemic rattled the markets and stocks took a beating

The benchmark recouped all the losses made during the market sell-off in March and reached a new peak in just 126 trading days. The rebound from the trough to a peak marks the fastest-ever recovery from a bear market in the history of the index. The benchmark is now up 4.9% this year.

The combination of unprecedented fiscal and monetary stimulus in response to the pandemic, hopes of a swift economic rebound and high chances of a successful coronavirus vaccine drove stocks higher. The U.S. economy is steadily recovering and the loss suffered due to the pandemic is less than feared. This is especially true as retail sales bounced back to their pre-pandemic levels in just a few months after slumping to a seven-year low in April. The unemployment rate dropped to 10.2% in July, below June's 11.1% mark. Moreover, the latest industry gauge indicates that U.S. manufacturing activity expanded in July at the fastest pace in 15 months.

Further, a booming technology sector, a rise in mergers and acquisitions, and a weak dollar led to a spike in the stock market. The recent dollar weakness is acting as a huge tailwind for the mega-cap companies, which derive most of their revenues from international markets. This is because a weak dollar has made dollar-denominated assets cheap for foreign investors, making U.S. multinationals more competitive and leading to increased profits. The ascent in stocks came despite the lingering uncertainty over the economic and political outlook.

While the gains were broad-based over the 126-day period, we have highlighted those stocks that led the astounding recovery over the past three months. These stocks have a solid Zacks Rank #1 (Strong Buy) or 2 (Buy) and will continue to outperform in the weeks ahead given their superior fundamentals.

The Mosaic Company (MOS - Free Report) – Up 50.4%

This company is a leading producer and marketer of concentrated phosphate and potash for the global agriculture industry. It saw positive earnings estimate revision of 23 cents over the past 90 days for this year and has an estimated earnings growth rate of 47.4%. The stock carries a Zacks Rank #2.

Apple Inc. (AAPL - Free Report) – Up 45.9%

This company designs, manufactures, and markets smartphones, personal computers, tablets, wearables and accessories worldwide. The stock saw solid earnings estimate revision of 61 cents over the past 90 days for this year. Apple has estimated earnings growth of 8.7%. Apple sports a Zacks Rank #1.

QUALCOMM Incorporated (QCOM - Free Report) – Up 43.6%

This company designs manufactures and markets digital wireless telecom products and services based on the Code Division Multiple Access technology. The stock saw solid earnings estimate revision of 24 cents over the past 90 days for fiscal year (ending September 2020). The company has an estimated earnings growth rate of 9.9%. It has a Zacks Rank #2.

Nvidia Corporation (NVDA - Free Report) – Up 40.6%

It is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit. The stock saw positive earnings estimate revision of 28 cents over the past 90 days for fiscal year (ending January 2021). Nvidia has estimated earnings growth of 36.4%. NVIDIA has a Zacks Rank #2.

Lam Research Corporation (LRCX - Free Report) – Up 40.6%

This company designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits worldwide. It saw massive earnings estimate revision of $2.29 over the past 90 days for fiscal year (ending June 2022). The company has an estimated earnings growth rate of 14.9%. The stock has a Zacks Rank #1.