Industrial Stocks Solid, Consumer Stocks Not So Much (XLY)
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Shares of Caterpillar (NYSE: CAT) are moved higher in early trading on Wednesday following solid earnings. In an interview with CNBC's Sqauwk Box, Caterpillar CEO attributed the earnings beat to having a well run business. He also said looser monetary policy helped drive revenue growth at the company.
Meanwhile, consumer discretionary stocks are finding little love. Last week, U.S. retail sales numbers were reported below consensus. The poor numbers painted a stark picture for consumers. Despite lower fuel costs, U.S. consumers are faced with significant challenges including stagnant wages and ongoing fears about a tittering economy. In July, U.S. consumer confidence hit a 5-month low. Higher food prices could hit consumers later this year.
Consumer Discretionary Select Sector SPDR ETF (NYSE: XLY) is lower by 3 percent in the past 5 trading sessions. Since the start of the year, consumer stocks have outperformed the broader market, but that trend is at risk of reversing.
UPS (NYSE: UPS) reported disappointing Q2 results and lower guidance this week. Investors are reading through the results and taking out retailer such as Amazon.com Inc. (Nasdaq: AMZN).
Shares of consumer name, McDonald's (NYSE: MCD), are lower by 3 percent in the past 5 trading sessions. Regarding McDonald's, Barclays analyst Jeffrey A. Bernstein said "2012 headwinds remain large for McDonald's, as evidenced by 2Q12 results, where the brand experienced "slower sales growth in most of our major markets", "significant cost pressures as expected" and the sizeable (albeit expected) negative FX impact."
Shares of auto maker Ford Motor Co. (NYSE: F) are lower by 4.15 percent in the past 5 trading sessions. Ford has a 3 percent weighting in XLY.
Meanwhile, consumer discretionary stocks are finding little love. Last week, U.S. retail sales numbers were reported below consensus. The poor numbers painted a stark picture for consumers. Despite lower fuel costs, U.S. consumers are faced with significant challenges including stagnant wages and ongoing fears about a tittering economy. In July, U.S. consumer confidence hit a 5-month low. Higher food prices could hit consumers later this year.
Consumer Discretionary Select Sector SPDR ETF (NYSE: XLY) is lower by 3 percent in the past 5 trading sessions. Since the start of the year, consumer stocks have outperformed the broader market, but that trend is at risk of reversing.
UPS (NYSE: UPS) reported disappointing Q2 results and lower guidance this week. Investors are reading through the results and taking out retailer such as Amazon.com Inc. (Nasdaq: AMZN).
Shares of consumer name, McDonald's (NYSE: MCD), are lower by 3 percent in the past 5 trading sessions. Regarding McDonald's, Barclays analyst Jeffrey A. Bernstein said "2012 headwinds remain large for McDonald's, as evidenced by 2Q12 results, where the brand experienced "slower sales growth in most of our major markets", "significant cost pressures as expected" and the sizeable (albeit expected) negative FX impact."
Shares of auto maker Ford Motor Co. (NYSE: F) are lower by 4.15 percent in the past 5 trading sessions. Ford has a 3 percent weighting in XLY.
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