Energy Sector Jolts Market Back Near Highs

Nick Perry (Schaeffer's Investment Research) submits: Last week we saw a broad-based selloff with utilities, housing, and realty ETFs hardest hit. This week we find a bounce back.

More than 90 percent of my list gained ground this week as only ETFs related to bonds, housing, and real estate failed to find sponsorship from the bulls. Meanwhile, a glance to the top of the list shows that energy-related stocks seemed to be the bovine sector of choice this week.

The Oil Service HOLDRS (OIH) topped the performance chart with the PS Oil Services (PXJ) , iShares DJ U.S. Energy (IYE) , and US Oil Fund (USO) rounding out the top four. Also rising to the top of the list were utility-related funds and those tracking semiconductor stocks:

One of the interesting situations in this week's action is the divergent action between two seemingly related ETFs - the SPDR Homebuilders (XHB) and the PowerShares Building & Construction (PKB) . Both funds appear to be related to "construction" but clearly there is a serious difference in the makeup of the funds. The tables below show the top-10 components for each fund. (Data courtesy of the PowerShares and SSgA Funds websites.) Both funds show a fairly diverse weighting among the components but they share little in the way of overlap. It would seem that PKB simply shows a mix of stronger stocks.

Comments

[Old Trader:]

A casual glance shows that PKB is geared towards holdings in commercial/infrastruct... which is a healthy sector, as opposed to XHB, which is almost exclusively "residential".

Jan Sopoci

2007 Jun 17 03:42 PM