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Crude Inventories Pull Energy Sector Down, Utilities Soar

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Sector performances

All the component sectors of the SPDR S&P 500 ETF (SPY) rallied on December 16, 2015, following the FOMC’s (Federal Open Market Committee) statement release.

Despite the fact that industrial production fell 0.6% in November 2015 according to the Federal Reserve’s monthly index report of industrial production, stocks from all the sectors of SPY surged on the day, affirming confidence in the US economy.

The above graph presents the percentage change in the performances of the component sectors of the SPY as of December 16.

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Energy sector fell

The Energy Select Sector SPDR ETF (XLE) fell 0.7% on December 16 due to a drop in oil prices. As per the report on petroleum status released by the U.S. Energy Information Administration for the week ended December 11, 2015, there was a heavy buildup in crude oil inventories of 4.8 millions barrels.

Gasoline and distillates inventories also rose. As a result, US crude oil settled at $35.42 per barrel, and Brent crude fell 16 cents to close at $37.23 per barrel. Stocks of major oil and gas producing companies such as Denbury Resources (DNR), Pioneer Natural Resources (PXD), Marathon Oil (MRO), Cimarex Energy (XEC), and QEP Resources (QEP) fell on the day. These stocks yielded -8.7%, -7.0%, -4.7%, -4.3%, and -4.1%, respectively.

Utilities at the lead

As mentioned above, November 2015 was soft for the industrial economy. Still, the Fed’s decision pushed metals prices high along with the mining and materials sector.

Unusually warm weather created concerns for utility stocks such as electric utility companies. Still, the utilities sector emerged as a leading sector of SPY on December 16 as the Utilities Select Sector SPDR ETF (XLU) jumped 2.5% on the day. Read Moving Average Analysis of SPY’s Utilities Sector to learn more.

Top utility stocks on the day were NextEra Energy (NEE), CenterPoint Energy (CNP), and NRG Energy (NRG). They rose 5.0%, 4.2%, and 3.9%, respectively.

Let’s look at SPY’s key stocks on December 16, 2015.

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