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5 Stocks in S&P 500 ETF That Braved the Worst Start Since 2016
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The start of 2024 has been terrible for the U.S. stock market, with the nine-week bull run coming to an end. The S&P 500 had the worst start to a year since 2016, reflecting a sharp reversal of the roaring rally in the final two months of 2023.
SPDR S&P 500 ETF Trust (SPY), the proxy version of the S&P 500 Index, shed 1.7% in the initial week of 2024. Despite the losses, some stocks in the ETF stood tall. We have highlighted five stocks that were in the green in the same time period and have a Zacks Rank #1 (Strong Buy) or 2 (Buy). These are Everest Group Ltd. (EG - Free Report) , Cardinal Health Inc. (CAH - Free Report) , Regeneron Pharmaceuticals (REGN - Free Report) , Sysco Corporation (SYY - Free Report) and International Paper Company (IP - Free Report) .
Overstretched valuations, a decline in tech stocks and uncertainty about when the Fed will begin to cut rates have dampened investors’ optimism. The latest Fed minutes show that it wouldn’t cut rates as aggressively as expected for this year. This suggests an uncertain path toward interest rate cuts and reflects a growing sense that inflation is under control (read: S&P 500 ETF Approaches $500B AUM Landmark).
Though the job data report for December came in stronger than expected, it casts doubt on the expectations that the Fed would start cutting interest rates in March. The economy added 216,000 jobs in December, capping another robust year of growth in the face of higher interest rates. Overall, in 2023, the economy added 2.7 million jobs, down from 4.8 million in 2022.
The disappointing manufacturing and service data also added to the chaos. The U.S. manufacturing sector slipped further into contraction during December, according to the latest PMI data from S&P Global, as output declined and the downturn in new orders gathered pace. Services activity also slowed in December.
Further, the decline in tech stocks, especially Apple (AAPL - Free Report) and the other heavyweight names, took a toll on investors' sentiment. Apple lost more than $100 billion in the first few days of the new year, following downgrades from two analysts.
Let’s take a closer look at the fundamentals of SPY.
SPY in Focus
SPDR S&P 500 ETF Trust holds 503 stocks in its basket, with each accounting for no more than 7% of the assets. This suggests a nice balance across each security and prevents heavy concentration. The fund is widely spread across sectors with information technology, financials, healthcare and consumer discretionary accounting for a double-digit allocation each.
SPDR S&P 500 ETF Trust has AUM of $483.3 billion and charges 9 bps in fees per year. The product trades in a heavy volume of around 68 million shares a day on average, ensuring higher liquidity with a tight bid/ask spread, leading to lower trading costs for investors. SPY has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (see: all the Large Cap Blend ETFs here).
Below, we have highlighted the abovementioned five best-performing stocks in the ETF.
Best-Performing Stocks of SPY
Everest Group is a property and casualty insurer and reinsurer in all states, the District of Columbia, Puerto Rico and Guam. It underwrites property and casualty reinsurance for insurance and reinsurance companies in the United States and international markets. The stock rose about 5% last week. It has an estimated earnings growth rate of 12.62% for this year.
Everest Group carries a Zacks Rank #2 and has a VGM Score of A.
Cardinal Health is a nationwide drug distributor and provider of services to pharmacies, healthcare providers and manufacturers. The stock climbed about 5% in a week and has an expected earnings growth rate of 19% for the fiscal year (ending June 2024).
Regeneron is a biotechnology company focused on the discovery, development and commercialization of treatments targeting serious medical conditions. The stock has risen about 4% and has an estimated earnings growth rate of 2.4% for this year.
Sysco, through its subsidiaries, markets and distributes a range of food and related products primarily to the foodservice or food-away-from-home industry. The stock gained 3.4% last week and has an estimated earnings growth rate of 8% for the fiscal year (ending June 2024).
Sysco has a Zacks Rank #2 and a VGM Score of A.
International Paper is a global producer of renewable fiber-based products. It produces corrugated packaging products that protect and promote goods, which aid in worldwide commerce. The stock was up 3.1% and saw a solid earnings estimate revision of 13 cents over the past seven days for this year.
International Paper has a Zacks Rank #1 and a Momentum Score of B.
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5 Stocks in S&P 500 ETF That Braved the Worst Start Since 2016
The start of 2024 has been terrible for the U.S. stock market, with the nine-week bull run coming to an end. The S&P 500 had the worst start to a year since 2016, reflecting a sharp reversal of the roaring rally in the final two months of 2023.
SPDR S&P 500 ETF Trust (SPY), the proxy version of the S&P 500 Index, shed 1.7% in the initial week of 2024. Despite the losses, some stocks in the ETF stood tall. We have highlighted five stocks that were in the green in the same time period and have a Zacks Rank #1 (Strong Buy) or 2 (Buy). These are Everest Group Ltd. (EG - Free Report) , Cardinal Health Inc. (CAH - Free Report) , Regeneron Pharmaceuticals (REGN - Free Report) , Sysco Corporation (SYY - Free Report) and International Paper Company (IP - Free Report) .
Overstretched valuations, a decline in tech stocks and uncertainty about when the Fed will begin to cut rates have dampened investors’ optimism. The latest Fed minutes show that it wouldn’t cut rates as aggressively as expected for this year. This suggests an uncertain path toward interest rate cuts and reflects a growing sense that inflation is under control (read: S&P 500 ETF Approaches $500B AUM Landmark).
Though the job data report for December came in stronger than expected, it casts doubt on the expectations that the Fed would start cutting interest rates in March. The economy added 216,000 jobs in December, capping another robust year of growth in the face of higher interest rates. Overall, in 2023, the economy added 2.7 million jobs, down from 4.8 million in 2022.
The disappointing manufacturing and service data also added to the chaos. The U.S. manufacturing sector slipped further into contraction during December, according to the latest PMI data from S&P Global, as output declined and the downturn in new orders gathered pace. Services activity also slowed in December.
Further, the decline in tech stocks, especially Apple (AAPL - Free Report) and the other heavyweight names, took a toll on investors' sentiment. Apple lost more than $100 billion in the first few days of the new year, following downgrades from two analysts.
Let’s take a closer look at the fundamentals of SPY.
SPY in Focus
SPDR S&P 500 ETF Trust holds 503 stocks in its basket, with each accounting for no more than 7% of the assets. This suggests a nice balance across each security and prevents heavy concentration. The fund is widely spread across sectors with information technology, financials, healthcare and consumer discretionary accounting for a double-digit allocation each.
SPDR S&P 500 ETF Trust has AUM of $483.3 billion and charges 9 bps in fees per year. The product trades in a heavy volume of around 68 million shares a day on average, ensuring higher liquidity with a tight bid/ask spread, leading to lower trading costs for investors. SPY has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (see: all the Large Cap Blend ETFs here).
Below, we have highlighted the abovementioned five best-performing stocks in the ETF.
Best-Performing Stocks of SPY
Everest Group is a property and casualty insurer and reinsurer in all states, the District of Columbia, Puerto Rico and Guam. It underwrites property and casualty reinsurance for insurance and reinsurance companies in the United States and international markets. The stock rose about 5% last week. It has an estimated earnings growth rate of 12.62% for this year.
Everest Group carries a Zacks Rank #2 and has a VGM Score of A.
Cardinal Health is a nationwide drug distributor and provider of services to pharmacies, healthcare providers and manufacturers. The stock climbed about 5% in a week and has an expected earnings growth rate of 19% for the fiscal year (ending June 2024).
CAH carries a Zacks Rank #2 and has a VGM Score of A (read: Healthcare ETFs Start 2024 on a Positive Note).
Regeneron is a biotechnology company focused on the discovery, development and commercialization of treatments targeting serious medical conditions. The stock has risen about 4% and has an estimated earnings growth rate of 2.4% for this year.
Regeneron sports a Zacks Rank #1 and has a Momentum Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sysco, through its subsidiaries, markets and distributes a range of food and related products primarily to the foodservice or food-away-from-home industry. The stock gained 3.4% last week and has an estimated earnings growth rate of 8% for the fiscal year (ending June 2024).
Sysco has a Zacks Rank #2 and a VGM Score of A.
International Paper is a global producer of renewable fiber-based products. It produces corrugated packaging products that protect and promote goods, which aid in worldwide commerce. The stock was up 3.1% and saw a solid earnings estimate revision of 13 cents over the past seven days for this year.
International Paper has a Zacks Rank #1 and a Momentum Score of B.