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Real Estate and Energy Sectors Weigh Heavily on Consumer Sector

Renee Blakely

SPY Falls Slightly on Mixed Sector Performance

(Continued from Prior Part)

Sector performances

As mentioned in the last article, mining companies’ stocks and, therefore, the materials sector of the SPDR S&P 500 ETF (SPY) fell on November 25, 2015. The Materials Select Sector SPDR ETF (XLB) fell 0.6% on the day.

The above graph illustrates the performances of the component sectors of SPY as of November 25.

Real estate sector

The new home sales report issued by the US government for October 2015 showed an annualized rate of 495,000 new home sales. The reading fell short of consensus expectations, which were at the 499,000 level. Despite 10.7% monthly gains in October 2015, new home sales did not surge as expected. Therefore, there was a steep fall in the real estate sector of SPY on November 25, 2015.

Energy sector

As mentioned earlier, US crude oil rose on November 25 in the wake of rising tensions in the Middle East after Turkey downed a Russian jet. Concerns over the regular supply of crude oil from the oil-producing region led to the rise in oil’s price from November 23 onward. However, energy stocks plunged on Wednesday, November 25, despite the rise in oil prices.

The energy sector suffered due to the build up of crude oil inventory as reported by the U.S. Energy Information Administration (or EIA). According to the report released by the EIA for the week ended November 20, 2015, crude oil inventories built up by 1 million barrels against a prior inventory build up of 0.3 million barrels.

Energy stocks, namely, EQT (EQT), Marathon Oil (MRO), EOG Resources (EOG), and Williams Companies (WMB), dropped -2.2%, -2.1%, -1.9%, and -1.9%, respectively, on November 25, 2015.

Let’s take a brief look at the consumer sectors and the healthcare sectors.

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