The bulls charged back today amid a lot of end-of-quarter rotation and portfolio window dressing. Possibly fearing that a market correction is in the offing, fund managers have been aggressively dumping current hi-fliers concentrated mostly in the "new" tech and the biotech areas. High P/E names such as Netflix (NFLX, P/E = 180), Linkedin (LNKD, P/E = 770),and Amazon (AMZN, P/E = 560) have suffered massive outflows in favor of "boring" industry groups such as food producers, transportation, "old" media (hey, the New York Times (NYSE:NYT) broke out to a new high today!), "old" tech (we'll get to those in a moment), and utilities.
Speaking of utes, the Utilities etf (NYSEARCA:XLU) popped to a new high today hitting a level not seen since before the 2008 recession. And why not? With reasonable P/Es and decent dividends, they won't face much competition as sources for reliable income until bond rates go up. And from what Janet Yellen said today, she's not anticipating on hiking rates soon. Here's a list of utes hitting new highs today in order of decreasing dividend yield (%): AVA ($30.65, 4%), PEG ($38.14, 3.9%), VVC ($39.39, 3.7%), LNT ($56.81, 3.6%), DTE ($74.29, 3.5%), NWE ($47.43, 3.4%), WEC ($46.55, 3.4%), EIX ($56.61, 2.5%), ITC ($37.35, 1.5%). Technically, Wisconsin Electric (NYSE:WEC) sports the most compelling chart, but because I'm a Cheesehead I may be a slightly biased in my opinion. The XLU is also a good choice and pays a nice dividend, too (3.6%).
Food and beverage producers also had a good day. Breaking out new highs recently: Diamond Foods (DMND, $34.93), Constellation Brands (STZ, $84.97), Pilgrim's Pride (PPC, $20.92), Tyson Foods (TSN, $44.01), Hormel (HRL, $49.27), Cal-Maine Foods (CALM, $62.78), Pinnacle Foods (PF, $29.86). Of these, Constellation (NYSE:STZ) is my choice--it sports the best chart and has a reasonable P/E of 8.5 (but it does not pay a dividend as some of the others do).
Old-guard tech names such as Microsoft (NASDAQ:MSFT) and Oracle (NASDAQ:ORCL) have been on the come-back trail in recent months. Today, Mr. Softee broke out of a fourteen year base on slightly heavier than normal volume. Apparently, investors as well as Wall Street analysts are liking the changing of the guard in senior management along with a refocusing of company efforts on cloud computing and mobile strategies. Oracle, too, blew through recent resistance on 3x volume to hit a level also not seen since 2000. Compared with the tech stocks mentioned above, the P/E's of these two stocks are more down-to-earth--15 for MSFT and 17 for ORCL. I rate both of these stocks as Buys and if I had to pick just one, it would be Microsoft for its more bullish chart and for its higher paying dividend--2.7% compared with 1.2% for Oracle. And if a market correction is in the cards, both of these stocks should be able to weather it well.