With the S&P 500 Index closing at a record today on the
final day of the first quarter, taking out the previous high
reached on the eve of the market meltdown that launched the Great
Recession, it's worth looking at the different pockets and funds in
the equities markets that are behind the move.
The index rose 10 percent in the first quarter and has rallied
for five straight months, extending a four-year rally, closing on
Thursday 6.34 points, or 0.41 percent, higher at 1569.19.
Behind that move, the SPDR S&P Transportation ETF
(NYSEArca:XTN) and the iShares Dow Jones Transportation Average
Index Fund (NYSEArca:IYT) are among the top 10 best-performing
year-to-date, posting returns that have outperformed broader U.S.
XTN has gained 22 percent so far this year, while IYT is up 18
percent since Jan. 1, according to data compiled by IndexUniverse.
By comparison, the broad S&P 500 Index has rallied as noted by
some 10 percent in the same period, while the Dow Jones industrial
average has gained some 11.25 percent year-to-date.
Strength in transports, particularly in the Dow, could be
construed as a positive indicator of the strength of the overall
equities rally-one that pushed the U.S. equities markets into or
near record-high territory in recent weeks-if Dow theorists have
The Dow Jones transports average-the segment of the market that
tracks the performance of transportation stocks such as railroads
and FedEx-has rallied more than 15.36 percent year-to-date, a rise
that puts the indicator up some 11 percent from its previous record
high closing of 5,618.25 hit in July 2011.
Meanwhile, the Dow Jones industrial average's latest record-high
closing of 14,539.14, reached just last week, amounts to a 3.3
percent gain from its long-standing previous 2007 record level.
In the end, both segments of the market often move in tandem,
and according to the decades-old Dow theory of stock price
movement-coined more than a century ago based on the works of
Charles Dow-a bull market in industrials will not last unless
transportation is rallying too.
The theory, which is a form of technical analysis many have
looked to in the past for indication of market direction, is that
for the market to be truly strong, goods need to be fabricated, but
the transportation of those manufactured goods need to be alive and
The S&P 500 Perspective
The story behind the rallying S&P 500 universe isn't all
that different, though it did close at a new record on Thursday
The S&P reached its all-time record today, eclipsing the
1,565.15 closing high set in October 2007-with year-to-date 2013
gains of around 10 percent-the S&P 500 Transportation is up
about 13 percent year-to-date, according to data compiled by
S&P Dow Jones Indices.
Other S&P 500 sectors outperforming the broader index
include financials, which are up 10.92 percent year-to-date; health
care, with gains of 15.225 percent; and consumer discretionary and
staples, up 11.8 percent and 17.5 percent, respectively.
On the flip side, the S&P 500 materials sectors has been the
laggard, with gains of 4.17 percent so far in 2013, followed by
information technology with gains of 4.21 percent year-to-date.
The SPDR Select Sector ETF Trust, which slices the S&P 500
into nine industry sectors, reflects some of these disparities at
an ETF level.
The funds' year-to-date performances, as well as how much they
represent in the overall S&P 500 mix, are as follows:
- Consumer Staples Select Sector SPDR Fund (NYSEArca:XLP),
representing 11 percent of the broad S&P 500 mix, and
including names in food, drug retailing, household and personal
products such as Procter & Gamble, Coca-Cola and Walmart, is
up 133.95 percent year-to-date.
- Health Care Select Sector SPDR Fund (NYSEArca:XLV),
representing 12.3 percent of the total S&P 500 mix, is up
15.37 percent year-to-date.
- Consumer Discretionary Select Sector SPDR Fund
(NYSEArca:XLY), representing 11.6 percent of the total S&P
500 mix, including names in media, auto, hotels and retail such
as Comcast, Home Depot, Amazon.com and McDonald's, is up 11.72
- Financial Select Sector SPDR Fund (NYSEArca:XLF),
representing 16 percent of the total S&P 500 mix, is up 11.1
- Energy Select Sector SPDR Fund (NYSEArca:XLE), representing
11 percent of the mix, is up 11.05 percent year-to-date.
- Utilities Select Sector SPDR Fund (NYSEArca:XLU),
representing 3.45 percent of the total S&P 500 mix, up 11.97
- Industrial Select Sector SPDR Fund (NYSEArca:XLI),
representing 10 percent of the total mix, is up 10.18
- Technology Select Sector SPDR Fund (NYSEArca:XLK),
representing 21 percent of the total S&P 500 mix and
comprising both information technology and telecommunications
names such as Apple, Microsoft, Intel, Visa and eBay, is up 4.92
- Materials Select Sector SPDR Fund (NYSEArca:XLB),
representing 3.45 percent of the total mix, and including
chemical, construction materials, metals and mining, and paper
product names such as Monsanto, Dow Chemical and Freeport McMoRan
Copper & Gold, is up 4.37 percent.
For comparison, the SPDR S&P 500 ETF (NYSEArca:SPY)-the
largest ETF in the world, with some $125 billion in assets-has
rallied approximately 10 percent since the beginning of the
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