Stock Market Today: Energy Stocks Take a Turn in the Spotlight

Exxon Mobil (XOM) and Chevron (XOM) led a big Tuesday for energy stocks and other cyclical sectors, and lifted the Dow to modest gains.

Positive news in the form of European stimulus measures and upbeat earnings reports from U.S. blue chips sent stocks in cyclical sectors higher today.

On Tuesday, the EU's European Commission agreed to a 750-billion-euro rescue package that raised hopes for a similar bill being discussed in Washington.

Also on Tuesday, Coca-Cola (KO, +2.3%) advanced after reporting better-than-expected earnings and expressing optimism that the worst of the pandemic's economic hit was behind it. It still was a difficult quarter, with net sales plunging 28% year-over-year, but unit case volumes have been improving in recent months.

That followed International Business Machines' (IBM, -0.3%) Monday evening report, which included Street-beating revenues and profits.

"From a 'big picture' perspective, COVID-19 related challenges are presenting IBM both headwinds and tailwinds, accelerating the cannibalization of the company's legacy-based software and services businesses (roughly 70% of run rate), while also boosting demand for its Cloud-based offerings," write Wedbush analysts, who rate the stock at Neutral (equivalent of Hold).

Energy stocks (including several of these outperformers of the past few months) were among the day's biggest winners on a 2.8% gain in U.S. crude to $41.96 per barrel; Exxon Mobil (XOM, +5.1%) and Chevron (CVX, +7.2%) led the Dow Jones Industrial Average 0.6% higher to 26,840.

The S&P 500 climbed 0.2% to 3,257, while the Nasdaq Composite reversed its Monday gains with a 0.8% decline to 10,680. Small caps were the biggest winner today, however, with the Russell 2000 gaining 1.3% to 1,487.

Know When to Fold 'Em

While some stocks continue to play catch-up, the path for the broader markets gets significantly more difficult from here.

UBS, for instance, recently reiterated that its S&P 500 price target for June 2021 is a mere 1.3% from here.

"Our S&P 500 EPS estimates of USD 122 (-26%) and USD 156 (+28%) for 2020 and 2021, respectively, remain unchanged," UBS analysts write. "Overall, results should help sustain the rally we have seen over the last four months. Our June 2021 S&P 500 price target remains 3,300."

Without a rising tide, stock selection becomes all the more important … not just in picking winners, but also identifying (and staying away from) losers.

Much of the carnage is already in the rear-view mirror: Dozens of stocks have cut or suspended their dividends, and more than a handful of companies have declared bankruptcy as their finances unraveled. However, numerous stocks still are flashing bright, red warning signs, and in many cases they were doing so long before COVID-19 was in the picture.

Read on as we highlight 14 stocks current investors should consider taking some profits on – and would-be buyers might be better off avoiding. In some cases, coronavirus could weigh on them long after the rest of the market moves ahead; in others, COVID-19 merely exacerbated already-bad situations. And still other stocks on this list have actually heated up too much and could have a difficult time racking up additional gains.

Most Popular

Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
11 Best Monthly Dividend Stocks and Funds to Buy
Kiplinger's Investing Outlook

11 Best Monthly Dividend Stocks and Funds to Buy

Your bills come monthly. Why not your dividend checks? These are some of 2021's best monthly dividend stocks and funds for easier income planning.
May 25, 2021
4 Strategies to Reduce Taxes in Retirement
retirement planning

4 Strategies to Reduce Taxes in Retirement

Don’t let the possibility of higher taxes in the future sink your retirement income plan. Consider these four ways to help manage your taxes, keeping …
May 31, 2021


11 Best Tech Stocks for the Rest of 2021

11 Best Tech Stocks for the Rest of 2021

Tech stocks have struggled in recent months, but analysts are bullish on the growth prospects for these 11 picks.
June 3, 2021
5 Tech Stocks That Bargain Hunters Will Love
tech stocks

5 Tech Stocks That Bargain Hunters Will Love

The market is frothy, and tech stocks are certainly to blame. But with these five picks, you can get exposure to the sector without getting fleeced.
May 27, 2021
Stock Market Today 6/11/21: Stocks Tread Water Ahead of June Fed Meeting
Stock Market Today

Stock Market Today 6/11/21: Stocks Tread Water Ahead of June Fed Meeting

The S&P 500 managed to eke out a new record high, while the Dow muscled its way into the green at the close.
June 11, 2021
The Next GameStop? 25 High Short Interest Stocks

The Next GameStop? 25 High Short Interest Stocks

A recent trading frenzy around heavily shorted stocks has targeted names such as these. But beware: The music could stop at any moment.
June 11, 2021