Stock Market Today: Dow Ekes Out Record, Nasdaq Retreats Again

Energy and materials stocks led the way Wednesday as good (albeit not great) economic data was enough to push the Dow to new highs.

Oil rigs
(Image credit: Getty Images)

The Dow Jones Industrial Average managed to set an all-time high amid, for a third straight day, a palpable investor preference for the reopening trade.

Payroll provider ADP on Wednesday reported that American private-sector employers added 742,000 jobs last month – below consensus expectations for 800,000 jobs, but a massive improvement from March's 565,000.

Meanwhile, the Institute for Supply Management showed a services index reading of 62.7 in April; while anything above 50 suggests expansion, the reading missed forecasts and was down a point from March.

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"April's print is very strong any way you slice it, with the reading still at its second-highest level, and accompanied by an even more robust 64.7 print for the Markit service sector PMI," says Barclays economist Jonathan Millar. "Hence, we see little reason to infer anything but positive signals from today's report, which points to a sustained acceleration in service sector activity with ongoing progress in the vaccination campaign and measures by many states and municipalities to ease social distancing restrictions."

Both data points still represented signs of growth, which was enough to bolster energy stocks such as Exxon Mobil (XOM (opens in new tab), +3.0%) and Chevron (CVX (opens in new tab), +2.7%) on a slightly down day for oil prices, and jolt materials plays such as Dow (DOW (opens in new tab), +2.8%) and gases firm Linde (LIN (opens in new tab), +3.0%).

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Other notable movers were General Motors (GM (opens in new tab), +4.1%), which gained on a wide Q1 earnings beat ($2.25 per share vs. estimates for $1.04), and Peloton Interactive (PTON (opens in new tab), -14.6%), whose shares cratered after announcing voluntary recalls of all Tread and Tread+ treadmills, which have caused one death and several injuries.

While early gains fizzled late, the Dow once again led the major indexes with a modest 0.3% gain to a record 34,230. The S&P 500 (up marginally to 4,167) inched ahead, while the Nasdaq Composite (-0.4% to 13,582) suffered its fourth consecutive decline.

Other action in the stock market today:

  • Facebook (FB (opens in new tab), 1.1%) was in focus today, after the company's oversight committee said it was right to ban former President Donald Trump from its platform following the Jan. 6 attack on the U.S. Capitol citing a "clear, immediate risk of harm," but it was not justified in making the ban indefinite. "The reaction on both sides to Facebook's Oversight Board statement on former President Trump's suspension speaks to how central these social media platforms have become for interpersonal communication," says David Keller, Chief Market Strategist at StockCharts.com (opens in new tab). Facebook now has six months to decide if the ban will be permanent.
  • Jessica Alba's Honest (HNST (opens in new tab), +43.8%) surged in its market debut, after the initial public offering (IPO) last night was priced at $16 per share. HNST stock opened today at $21.22, climbed as high as $23.88, and closed at $23.00.
  • The small-cap Russell 2000 was off by 0.3% to 2,241.
  • U.S. crude oil futures slipped marginally to end at $65.63 per barrel.
  • Gold futures gained 0.5% to settle at $1,784.30 an ounce.
  • The CBOE Volatility Index (VIX) declined by 2.1% to 19.08.
  • Bitcoin prices rebounded 4.5% to $57,105.99. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)

stock chart for 050521

(Image credit: YCharts)

How to Get Out of This Holding Pattern

Even with the Dow at new highs, the broader market has been mired in mostly sideways action for weeks. Fortunately, investors looking to liven up their portfolios have quite a few options at their disposal.

Longer-term, you can find difference makers by looking at companies that are shaping the future via innovative technologies that could be with us for years to come. You can find a host of these among Argus Research's best "innovator" picks.

In the shorter term, you can join in the reopening trade via oil stocks, travel plays and other clear beneficiaries of ramped-up vaccinations and looser COVID restrictions. But you can also do well by listening closely for the sound of sabers rattling.

Activist investors – Wall Street's well-known (and often productive) malcontents – have made a name for themselves by taking significant stakes in underperforming companies and rallying shareholder votes to implement measures they believe will drive up their stocks' value. Their mere involvement can put a charge into shares, and occasionally their successes do end up translating into stronger operations … and stronger returns.

Read on as we check out 13 such stocks that are currently getting the full-court press from Wall Street activists.

Kyle Woodley
Senior Investing Editor, Kiplinger.com

Kyle is senior investing editor for Kiplinger.com. As a writer and columnist, he also specializes in exchange-traded funds. He joined Kiplinger in September 2017 after spending six years at InvestorPlace.com, where he managed the editorial staff. His work has appeared in several outlets, including U.S. News & World Report and MSN Money, he has appeared as a guest on Fox Business Network and Money Radio, and he has been quoted in MarketWatch, Vice and Univision, among other outlets. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.