Why the Utilities Sector Topped SPY



Utilities sector topped SPY

Among the different sectors within the SPDR S&P 500 ETF (SPY), the utilities (XLU) sector was the only sector to end on a positive note yesterday, rising 1.6%. Utilities stocks generally pay high dividends. In times of Market turmoil, investors turn to safe, dividend-paying utilities stocks. SPY fell almost 8.4% over the course of a month, but the utilities sector (XLU) rose 5.3% during the same period. Utilities stock Duke Energy (DUK) returned nearly 7% in the same period. Currently, the utilities sector (XLU) is trading 6.2% above its 100-day moving average. Over the last six months, it has traded on par with its 100-day moving average.

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Walmart weighs on consumer staples sector

The consumer staples (XLP) sector fell 0.45% yesterday. The 3% fall in Walmart’s (WMT) stock weighed on the sector. As we discussed in the previous part of this series, Walmart cut its full-year revenue forecast because of the strong US dollar. This hammered the stock and weighed on the index.

Energy sector at the bottom of SPY

The energy sector (XLE) fell almost 1.3% yesterday due to the fall in crude oil prices in the latter part of the day. The US crude oil inventory rose by 2.1 million barrels, which again created panic in the oversupply market. Chevron (CVX) and ConocoPhilips (COP) fell 1.8%, and 0.62%, respectively, in yesterday’s trade.

In the next part of this series, we’ll analyze the performance of IBM.


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