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Sell-Off in All the Component Sectors of the SPY ETF

Renee Blakely

Draghi’s Dovish Move Baffled Investors and Took SPY Down

(Continued from Prior Part)

Sector performances

The following graph presents the performances of the component sectors of the SPDR S&P 500 ETF (SPY) on December 3, 2015. The sell-off in all the component sectors of the SPY Exchange Traded Fund continued for the second consecutive day as investors consolidated their gains ahead of the Federal Open Market Committee’s (or FOMC) meeting.

The Federal Reserve Chairperson, Janet Yellen, signalled that the December rate-hike is still on the table in the wake of economic data released on Thursday, December 3. Let’s quickly glance through the US economic data released on the day.

Economic overview

The initial jobless claims rose up by 9,000 for the week ended November 28, above the prior reading of 260,000. But they came in at the consensus reading of 269,000, and that’s still considered low. Therefore, Yellen seemed confident about the US employment situation report to be released on Friday, November 4. Also, factory orders jumped sharply from the prior reading of -1.0% to 1.5% for October 2015. The monthly change in factory orders was upbeat for the manufacturing sector in the industrial production report. On the other hand, ISM’s non-manufacturing index for November 2015 came in at 55.9 against the prior reading of 59.1. But the strength in the index reading remained solid, bolstering the rate-hike probability.

Top-performing sectors of the SPY ETF

When we look at the year-to-date returns of the component sectors of the SPDR S&P 500 ETF (SPY) as of December 3, 2015, then the consumer discretionary sector, the consumer staples sector, the healthcare sector, and the technology sector performed very well, and US investors seemed to consolidate these gains in such volatile times.

Next, let’s analyze the healthcare sector with the help of Allergan (AGN), Mylan (MYL), Medtronic (MDT), Dentsply International (XRAY), and Bristol Myers Squibb (BMY).

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