5 Hot Stocks In The Dow ETF Last Week

After being hurt badly by the Turkey crisis early last week, the Wall Street regained momentum to close the week on optimism over trade talks between the United States and China and signs of stabilization in Turkey. Notably, Dow Jones Industrial Average closed at its highest level since February.

With abating geopolitical tensions, the bullish long-term fundamentals, including surging corporate profits and bouts of upbeat data, are driving investors to riskier assets. Total earnings from 93.4% of the S&P 500 total market capitalization that have reported so far are up 25.5% from the same period last year on 9.9% higher revenues, with 79.2% of the companies beating EPS estimates and 72.8% surpassing revenue estimates. Earnings and revenue growth, as well as the proportion of companies beating EPS estimates, are tracking above other recent periods.

The American economy has been on a solid growth path with GDP growth expanding 4.1% annually in the second quarter, representing the fastest pace of growth in nearly four years. The number is almost double the revised Q1 growth rate of 2.2%. With this, GDP grew 3.1% for the first half of the year and is poised to hit 3% annual growth for this year, buoyed by historic tax cuts, infrastructure investment, higher government spending, deregulation, rising wages and record unemployment. Per Trump, “the United States is on track to hit the highest annual growth rate in over 13 years".

Further, an impressive labor market, increase in wages, the rise in consumer confidence and higher consumer spending are boosting economic activities. A rising rate scenario also signals a strengthening economy, which will spur further growth in the stock market.

Given this, SPDR Dow Jones Industrial Average ETF (DIA - Free Report) tracking the Dow Jones Index has gained 1.3% over the past week. 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 more than $21.2 billion and average daily volume of 4.6 million shares. Holding 30 blue chip stocks, the fund is widely spread across components with each holding less than 9.2% share. Industrials (21.7%), information technology (18.5%), financials (15.4%), consumer discretionary (14.6%) and healthcare (13.4%) are the top five sectors. DIA charges 17 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.

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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 specific ...

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