U.S. Markets closed

Retail Stocks Boost Consumer Discretionary Sector

Renee Blakely

SPY Falls Slightly on Mixed Sector Performance

(Continued from Prior Part)

Retail industry

Retail stocks contributed considerably to the consumer discretionary sector of the SPDR S&P 500 ETF (SPY) recently with upbeat quarterly earnings. However, there were exceptions such as Macy’s (M) and Nordstrom (JWN).

The above graph presents the performances of the retail stocks that yielded significant returns recently. These stocks are involved in apparel, leisure, home improvement, and the Internet.

The graph shows the stock price performances of Netflix (NFLX), Ross Stores (ROST), TJX Companies (TJX), Mattel (MAT), Lowe’s (LOW), and Home Depot (HD). These stocks rose 0.7%, 0.6%, 1.6%, 1.8%, 0.3%, and 0.8%, respectively, on November 25, 2015. Also, the SPDR S&P Retail ETF (XRT) yielded 1.4% on the day.

The beta of each of the above stocks is less than one or just above one, which means that they are less volatile. All these stocks traded above their respective 100-day, 50-day, and 20-day moving averages, indicating upward stock price movement.

Yields of these stocks were better than other retail stocks over the trailing-three-month period. Short-term returns were also considerable, as the stocks’ trailing-five-day returns were 2.9%, 13.6%, 4.8%, 1.9%, 5.6%, and 6.4%, respectively, as of November 25.

The analyst stock price targets were above the trading prices for all these stocks except NFLX. NFLX traded at $124.16, while its target price was set at $122.56. Therefore, the other stocks have upward potential in their price movements. The average growth potential in the upward movement of these stocks is 5.6%.

Electronic Arts rebounded

Electronic Arts (EA) rebounded on Wednesday, November 25, 2015, after a short slide as GameStop (GME) warned about weakness in the sales of the EA’s video game Star Wars Battlefront. EA gained on the day as its rating was upgraded and reiterated. Analysts at Mizuho reaffirmed their “buy” rating on the stock, while analysts at Oppenheimer and Macquarie placed “outperform” ratings on the stock.

Let’s look at the key stocks of the SPDR S&P 500 ETF (SPY) as of November 25, 2015.

Continue to Next Part

Browse this series on Market Realist: