Consumer Discretionary ETF (XLY) Rips Higher As Investors Bet On Early-Cycle Plays

They say consumer discretionary stocks are great early-cycle plays and today the 6% upside move in the ETF Consumer Discretionary Select Sector SPDR (NYSE: XLY) is sending the message that some investors are betting big that the end of the recession is here or near.

Consumer discretionary stocks are very economically sensitive, with the companies in the category providing goods and services that are optional or 'discretionary', like running shoes or fast food. Consumer Staple companies held by the ETF include Nike (NYSE: NKE), McDonald's (NYSE: MCD), Amazon.com (Nasdaq: AMZN).

The direct opposite of consumer discretionary is consumer staples, which provide goods and services that are considered 'necessary' like toothpaste or laundry detergent. Consumer Staples are represented by the ETF Consumer Staples Select Sector SPDR (NYSE: XLP). Consumer Staple companies held by the ETF include Procter and Gamble (NYSE: PG), Kraft Foods (NYSE: KFT) and Wal-Mart (NYSE: WMT). The XLP is up 2.4% today, much less than the move in the XLY.

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