Stocks reversed lower Tuesday, with the Nasdaq composite ending with a 0.2% loss as Nvidia (NVDA) and other chip stocks sharply pared their gains.
X The tech-heavy index rallied as much as 0.9% intraday. But PowerShares QQQ Trust (QQQ) held a 0.1% gain to lead major index ETFs, while SPDR S&P 500 (SPY) gave up 0.4% and SPDR Dow Jones Industrial Average (DIA) fell 0.45%.
Among sector funds in the stock market today, chips and technology bucked the downtrend. VanEck Vectors Semiconductor (SMH) finished flat and iShares PHLX Semiconductor (SOXX) edged 0.1% higher. Component stock Nvidia, up as much as 3% intraday, trimmed its gain to 0.6%. Applied Materials (AMAT) showed similar action; Broadcom (AVGO) reversed to a 0.7% loss.
The biggest losers included banks, homebuilders and metals miners. IShares U.S. Home Construction (ITB) and SPDR S&P Homebuilders (XHB) fell nearly 2% each. Toll Bros. (TOL) gapped down and sank 7% after reporting lower-than-expected quarterly results.
Bitcoin Investment Trust (GBTC) hit a new high before diving 14%. Bitcoin prices got closer to the $12K level and were recently trading around $11,800. CBOE Global Markets (CBOE) will start trading Bitcoin futures on Dec. 10 and CME Group (CME) on Dec. 18.
Blue Chip Bonanza?
With the Dow Jones industrial average trading near record highs, perhaps it’s no wonder a consumer staples ETF is getting close to a possible breakout.
Consumer Staples Select Sector SPDR (XLP) is shaping the right side of a cup base with a potential buy point at 57.46, or a dime above the left-side high. It’s logged six consecutive up days through Monday. Shares climbed 3% after a prior cup-with-handle breakout in April to their June 5 high.
The fund, which will mark its 19th anniversary Dec. 16, has amassed $8.4 billion in assets. As its name implies, XLP tracks the Consumer Staples Select Sector Index. Companies in the index include food and drug retailers, food and beverage producers, household and personal products makers and tobacco firms.
Consumer defensive stocks accounted for nearly 96% of assets as of Dec. 1, according to Morningstar Direct, while health care names made up the remaining 4%. Three of its top 10 holdings were Dow component stocks: Procter & Gamble, Coca-Cola and Wal-Mart Stores. Wal-Mart, up 40% year to date through Monday, has outpaced the broader market by a wide margin. Coca-Cola has gained 10%; P&G is up 9%. Wal-Mart has been trading near record highs since an 11% gap-up move Nov. 16 on an earnings beat and upbeat holiday-quarter guidance.
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XLP has returned 11.8% year to date as of Dec. 1, trailing the S&P 500’s 20.3% advance. Its posted average annual returns of 12.6%, 9.8% and 9.7%, respectively, over the past five, 10 and 15 years vs. the benchmark index’s 15.6%, 8.2% and 9.3% gains for those same periods.
The ETF offers an annualized dividend yield of 2.6%, above the S&P 500’s average 1.8% payout. The expense ratio is 0.14%.
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