Industrials gain as investors shrug off weaker output data

Sep. 06, 2022 12:03 PM ETCaterpillar Inc. (CAT)XLI, MMM, LXU, HAYW, JBIBy: Rob Williams, SA NY1 Comment

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Industrial stocks rose Tuesday morning to erase a brief loss after an indicator of business output was weaker than estimated. The Industrial Select Sector SPDR ETF (XLI) rose 0.6% to $92.72 a share by 11:53 a.m. ET, adding to Friday’s 1.1% gain that partly reversed five days of losses.

The S&P Global US PMI Composite for August fell to 44.6 -- compared with an expected reading of 45.0 -- from 47.7 in the prior month. The reading reflecting a broad-based contraction in output among all sectors for the first time since May 2020.

Hayward Holdings (HAYW), a supplier of equipment for swimming pools, rose 5.6% to $10.84. The gain helps to reverse recent losses.

Hayward on Thursday hit an all-time low of $10.14 as markets fell on continued concerns about Federal Reserve policy. The central bank’s efforts to fight inflation by raising interest rates have pressured a broad group of construction stocks.

Janus International (JBI), a maker of construction materials, rose 3% to $10.61.

Among the biggest decliners, LSB Industries (LXU) fell 3.4% to $15.73. The maker of nitrogen fertilizers is sensitive to changes in natural gas prices, which have fluctuated as Russia curtails supplies to Western Europe amid the war in Ukraine.

Seeking Alpha contributor Kempano Investor has a Buy rating on Hayward (HAYW) because of its valuation. Seeking Alpha contributor Mare Evidence Lab has a Hold rating on LSB (LXU) on concerns that commodity prices may fall from record highs.

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