Dow Tops 32,000 For The First Time: 5 Best Stocks In The ETF

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Wall Street has been witnessing volatility lately driven by surging bond yields, which has sparked inflation fears. While the S&P 500 and the Nasdaq Composite Index have been taking a hit from the tech and high-growth sell-offs, Dow Jones is roaring higher with cyclical sectors back in favor. The blue-chip index, which has significant exposure to these sectors, touched 32,000 for the first time.

This is especially true as rising yields is an indicator of economic improvement. Investors are betting on the stocks that are poised to gain most from the recovering economy backed by faster vaccine deployment, continued progress on more vaccines and hopes of further stimulus. With COVID-19 cases falling globally in the recent weeks, lockdown measures and economic restrictions are being lifted, providing impetus to the economy. Strong corporate earnings as well as signs of a healing labor market also bode well for the economic growth that would lead to outperformance of cyclical sectors.

The Fed in its latest testimony signaled that it would continue to remain accommodative with its near-zero interest rates and monthly bond purchases.

Given this, SPDR Dow Jones Industrial Average ETF (DIA - Free Reporttracking the Dow Jones Index also hit new record highs, gaining 4.7% so far this year. 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 $26.3 billion and average daily volume of 2.8 million shares. Holding 30 blue chip stocks, the fund is widely spread across components with each holding less than 7% share. Information technology (21.6%), industrials (17.3%), healthcare (16.5%), financials (15.9%) and consumer discretionary (12.5%) are the top five sectors. DIA charges 16 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook. 

Though most stocks in the fund’s portfolio were in the green over the past week, we have highlighted the five best-performing stocks in the ETF:

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Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any ...

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