Healthcare Sector Rebounds on October 7, Leads SPY by 1.6%
SPY and EWU Ride High on Optimistic Outlook on October 7
Rebound in healthcare sector
Biotech stocks are very volatile. They’re high beta stocks and very sensitive to the broad market movement. The healthcare sector rebounded on October 7, taking the lead among the nine component sectors of the SPDR S&P 500 ETF (SPY).
The above graph shows the percentage changes in the component sector performances on October 7. Biotech stocks that gained majorly on October 7 were Regeneron Pharmaceuticals (REGN), Amgen (AMGN), and Celgene (CELG). The stocks rose 5.6%, 4.8%, and 4.3%, respectively, that day.
The healthcare sector was followed by the material and mining sector. Mining companies kept surging on investor outlook for the broad market. The recent rise in oil prices, the rally in the industrial sector, and the stimulus policies of governments in China and European countries have pushed mining and material stocks in an upward direction.
The gainers of the sector on Wednesday, October 7, were Freeport-McMoRan (FCX), CF Industries Holdings (CF), and Mosaic (MOS). The stocks returned 9.97%, 5.39%, and 4.40%, respectively, on that day.
The fall in the utility sector reaffirms investor optimism in equities since the utility sector is held as the bond proxy.
Key stocks of the day
The stocks at the top of the SPDR S&P 500 ETF (SPY) were Freeport-McMoRan (FCX), Genworth Financial (GNW), and Wynn Resorts (WYNN). These stocks led SPY by 9.9%, 6.2%, and 6.1%, respectively, on October 7. FCX stock rose that day after the company announced the appointment of two associates of Carl Icahn, an American business magnate and investor, to its board of directors.
The stocks at the bottom were Yum! Brands (YUM), Denbury Resources (DNR), and Nordstrom (JWN). These stocks yielded -18.8%, -9.9%, and -7.3%, respectively, on October 7.
YUM, parent company of KFC, Taco Bell, and Pizza Hut, fell almost 19% that day. It missed analysts’ expectations of revenues and profits. The retail restaurant company suffered a major setback due to a fall in revenues from China. Revenues from China account for 52% of YUM’s total revenue, so these losses were substantial.
The buoyant performance of the US stock market was accompanied by the UK stock market on Wednesday. In the next part of this series, we’ll take a look at the UK market’s key performers.
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