Energy sector versus the broader market
Between March 23 and March 30, 2017, the Energy Select Sector SPDR ETF (XLE) rose 1.9%. It was the largest gainer among the sector-based SPDR ETFs that we’ll compare in this part of our series. US crude oil (USO) (USL) May futures rose 5.6% between March 23, 2017, and March 30, 2017. The rise in XLE corresponds to the rise in oil prices.
Among the SPDR ETFs, the Utilities Select Sector SPDR Fund (XLU) fell the most. It fell ~1.1% from March 23, 2017, to March 30, 2017. The returns of the above SPDR ETFs are also adjusted for dividends.
During the same period, the S&P 500 Index (SPY) (VFINX) rose 1%, while the Dow Jones Industrial Average (DIA) (DJIA-INDEX) rose 0.3%. The tech-heavy NASDAQ Composite (QQQ) (COMP-INDEX) rose 1.7% during this period.
The rise in XLE and its components could have contributed to the gains in the broader market. The energy sector accounts for ~7.6% of the S&P 500 and ~6.4% of the Dow Jones Industrial Average. However, the sector accounts for only ~0.9% of the NASDAQ Composite.
Crude oil this week
On March 31, 2017, at 3:07 AM EST, US crude oil (OIIL) May futures were trading at $50.29 per barrel, a rise of 4.8% compared to the closing price on March 24, 2017. Crude oil will likely close on a positive note this week. Between March 17 and March 24, 2017, crude oil fell 2.7%.
Apart from the impact on the broader market, movements in crude oil (SCO) prices can also directly impact ETFs like the iShares US Oil Equipment & Services ETF (IEZ), the SPDR S&P Oil & Gas Equipment & Services ETF (XES), and the Guggenheim S&P 500 Equal Weight Energy ETF (RYE).