This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Sector ETFs for April: Energy, Materials, Consumers

NEW YORK (TheStreet) -- Europe's debt woes continue to steal headlines. However, as March made clear, China is increasingly becoming the dominant international elephant in the room. As the nation struggles to maintain growth and defend against a potential hard landing, certain cyclical corners of the marketplace have been greeted with substantial headwinds. The most notable victims have been the energy and materials sectors.

Given that oil prices remain buoyed over the psychologically important $100-per-barrel level, investors would think that energy companies would be sitting pretty as we embark on the second quarter of 2012. This has not been the case. Rather, as China pares back its growth projections, these producers have taken a sharp shot across the bow.

As I mentioned in this week's, "5 ETFs to Watch This Week," the Energy Select Sector SPDR (XLE) has suffered some particularly notable losses over the past month, and is currently leading the Select Sector SPDR family in terms of losses. On a year-to-date basis, XLE's over-7% decline is trumped only by the Utilities Select Sector SPDR (XLU), which is off by nearly 14% during this period.

10 Dow Dogs That Are Barking for Gains Like energy, materials producers have hit a wall in recent weeks as China slowdown fears have cast a fog over industrial commodities. During the month of March, the Materials Select Sector SPDR (XLB) was another standout laggard, dipping nearly 3%.

With the energy and materials sectors dealing with daunting China-inspired headwinds, I am hesitant on funds like XLE and XLB, in the near term. This does not mean that risk should be written off entirely, however.

Historically, April is one of the strongest months for the U.S. stock market and investors can take steps to prepare for potential upside action using a handful of other options. Consumer-related funds, for instance, may offer a compelling opportunity.

7 Companies That Keep on Growing Last week's batch of consumer data came in mixed, with income growth showing little change and consumer spending jumping by the most in seven months. Given the rocky action we witnessed during the latter half of the month, commentators seemed to have homed in on the first statistic, although the latter point was particularly encouraging.

With energy prices on the rise, questions have lingered throughout the opening months of 2012 regarding the resilience of the domestic consumer. This piece of data has helped to confirm that shoppers are still willing to open their wallets.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
IYK $111.97 0.00%
XLB $47.10 0.00%
XLE $67.50 0.00%
XRT $44.20 0.00%
AAPL $93.74 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs