Consumer Stocks and the Technology Sector See Huge Gains

All the major sectors of the SPDR S&P 500 ETF (SPY), with the exception of the financial services sector and materials sectors, rose in yesterday’s trade. The following graph illustrates the percentage changes in the performances of the component sectors of SPY.

The consumer staples sector and the consumer discretionary sector rose significantly yesterday. The Consumer Staples Select Sector SPDR Fund (XLP) and the Consumer Discretionary Select Sector SPDR Fund (XLY) rose 1.0% and 0.5%, respectively. As investors await the Fed’s decision on a rate hike, the equities of these dividend-paying sectors were a safer bet. The beta values of these stocks generally lie in the range of 0.37 –1.7, and these sectors contain both low- and high-volatility stocks.

The rally in the consumer discretionary sector was driven by Jarden (JAH) being acquired by Newell Rubbermaid (NWL). JAH rose 2.7%, while NWL fell 6.9%. Jarden (JAH) agreed to be acquired by Newell Rubbermaid (NWL) for $13.2 billion, or nearly $60 per share.

Top technology stocks in yesterday’s trade were First Solar (FSLR), Amazon.com (AMZN), and Cognizant Technology Solutions (CTSH). These stocks rose 5.7%, 2.8%, and 2.5%, respectively.

As Apple (AAPL) forecast a drop in 2016 iPhones sales, analysts at Morgan Stanley (MS) lowered their price target for the stock. Hence, AAPL fell 0.6% on the day.

Mining companies suffered as both the industrial metals and precious metals slumped on the day. Copper, represented by the United States Copper Index (CPER), fell 0.3%, and Freeport-McMoRan (FCX) fell 6.4%.

Newmont Mining Corporation (NEM) and Allegheny Technologies (ATI) fell 4.1% and 5.0%, respectively, as gold, represented by the SPDR Gold Shares Trust (GLD), and steel, represented by the ARCA Steel Index (STEEL), fell 1.3% and 1.1%, respectively.

In the next part of this series, we’ll analyze the consumer staples sector with the help of moving average analysis.