ETFs in 3 Sub-Sectors Hitting Fresh 52-Week Highs

by: Gary Gordon

The Dow, S&P 500 and Nasdaq offer three different ways to look at the U.S. market’s health. Even with the monumental start to December trading, however, none of the broad market indexes are hitting new 52-week peaks. (Not yet, anyway.)

It’s not like certain sectors haven’t been pulling their weight. SPDR Select Energy (NYSEARCA:XLE) and SPDR Select Consumer Discretionary (NYSEARCA:XLY) have not only been pulling their share of the cargo, they have set new high marks.

Still, you have to look a bit deeper. Certain industries, or sub-segments, appear to be making a case for a Santa Claus rally. Others appear to be holding the overall market back.

1. Semiconductors. Has anyone else noticed the absence of the summertime phrase,”double-dip recession.” While precious few believe that the U.S. economy is yet capable of standing on its own … and certainly not the Federal Reserve … semiconductor stocks do not lead when economies are contracting. In fact, most market-watchers look to semis as a way to gauge the start of vibrant expansion. Reality or anomaly, investors are snapping up Semiconductor ETFs.

Semiconductor ETFs At Brand New 52-Week Peaks
Approx 3-Month %
Semiconductor HOLDRs (NYSEARCA:SMH) 28.4%
SPDR Semiconductors (NYSEARCA:XSD) 29.2%
PowerShares Dynamic Semiconductors (NYSEARCA:PSI) 34.5%
S&P 500 SPDR Trust (NYSEARCA:SPY) 12.1%

2. Oil Services. Near the market’s lowest ebb in July, I explained what made oil services ETFs remarkably attractive. And while I still favored the lower volatility and consistent gains of energy pipeline MLPs, I specifically expressed why investors should give oil services ETFs a serious look at the close of the election. It’s hardly a surprise, then, to locate iShares DJ Oil Equipment & Services (NYSEARCA:IEZ) or SPDR Oil and Gas Equipment/Services (NYSEARCA:XES) near the very top of a 1000+ ETF leader-board.

Oil Services ETFs At Brand New 52-Week Peaks
Approx 1-Month %
iShares DJ Oil Equipment & Services (IEZ) 14.3%
SPDR Oil/Gas Equipment & Services (XES) 13.1%
Oil Services HOLDRs (NYSEARCA:OIH) 12.4%
S&P 500 SPDR Trust (SPY) 2.0%

3. Retail. The momentum that has favored consumer discretionary stocks has been justified thus far. Consumers ratcheted up their spending on “Black Friday” as well as on “Cyber Monday.” What’s more, consumer confidence has been increasing alongside improving job numbers. However, the enthusiasm may hit a few potholes, perhaps when beating earnings expectations in January 2011 could result in ”selling the news.” Nevertheless, there’s no denying that SPDR Retail (NYSEARCA:XRT) as well as First Trust Internet (NYSEARCA:FDN) represent some of most successful retailers in the world - from Priceline to Netflix to Amazon to EBay.

Retail and Retail-Related ETFs Hitting Fresh 52-Week Highs
Approx 3-Month %
SPDR Retail (XRT) 27.8%
First Trust Internet (FDN) 24.7%
S&P 500 SPDR Trust (SPY) 12.1%

Disclosure: Gary Gordon, MS, CFP is the president of Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC. Gary Gordon, Pacific Park Financial, Inc, and/or its clients may hold positions in the ETFs, mutual funds, and/or any investment asset mentioned above. The commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial, Inc. or its subsidiaries for advertising at the ETF Expert web site. ETF Expert content is created independently of any advertising relationships.