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Energy, Material, and Industrial Sectors Continued to Lead SPY

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SPY’s component sectors

The following graph shows the performances of the component sectors of the SPDR S&P 500 ETF (SPY). All of SPY’s 11 sectors ended in green territory on Thursday, October 8.

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Energy sector leads

After a small fall in the oil price on October 7, oil rebounded on Thursday, October 8. The brief snap in the oil prices occurred in the wake of the buildup in the US crude inventory, according to the report released by the EIA (U.S. Energy Information Administration). Oil is represented by the United States Oil Fund (USO). It rose 3% on the day despite the large crude inventory.

The rise in oil prices was driven by the optimistic outlook towards the emerging countries. It’s expected to increase the demand for oil in 2016. It’s supported by the anticipation that the US will accelerate its cut in oil production. These two viewpoints have led to the rise in oil price despite the supply glut that eventually pushed the energy stocks higher. The energy stocks that rose on October 8 were Denbury Resources (DNR), Noble Energy (NE), Marathon Oil (MRO), Anadarko Petroleum (APC), and Helmerich & Payne (HP). These stocks returned 12.2%, 6.3%, 5.3%, 4.6%, and 4.5%, respectively, on October 8.

Material and industrial sectors

The sectors that followed energy stocks on October 8 were the basic material sector, inclusive of mining and commodity related stocks, and the industrial sector. These sectors continued their bullish ride for the trailing five-day sessions over the changed outlook towards the mining sectors and the commodities markets. China is a major consumer of metals. Any positive move from China impacts these stocks. Although gold and copper prices fell on October 8, the miners experienced gains. The Global X Copper Miners ETF (COPX) rose by 1.8% on the day. The falling production cost enabled copper miners to keep producing despite the fall in the copper prices on the grounds of macro events.

Mining stocks like Freeport-McMoran (FCX), Allegheny Technologies (ATI), Nucor (NUE), and Alcoa (AA) rose by 3.5%, 4.1%, 1.7%, and 0.64%, respectively, on October 8.

Next, we’ll analyze the movers and shakers in the US stock market on October 8.

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