Understanding the Performance of Stock Market Sectors

It's important to stay up to date on the current state of global markets and stock sectors and access the latest news and research reports. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people achieve financial freedom through our website, podcasts, books, newspaper columns, radio programs and premium investment services. The energy sector is one of the most important stock market sectors and encompasses companies that do business in the oil and natural gas industry. It includes oil and gas exploration and production companies, as well as producers of other consumable fuels such as coal and ethanol.

The energy sector also includes related companies that provide equipment, materials and services to oil and gas producers. However, oddly enough, it doesn't include many renewable energy companies, which are instead considered to be utility companies. The materials industry is another important sector that includes manufacturers of chemicals, construction materials and packaging, as well as mining stocks and companies specializing in the manufacture of paper and forest products. The industrial sector is a broad category that encompasses a wide range of different businesses that generally involve the use of heavy equipment. Transportation stocks, such as airlines, railroads and logistics companies, are within the industrial sector, as are companies in the aerospace, defense, construction and engineering industries.

Companies that manufacture construction products, electrical equipment and machinery also belong to this sector, as do many conglomerates. The consumer commodities sector includes the goods and services that consumers need regardless of their current financial situation. This group also includes retail companies that specialize in selling commodities such as supermarkets. Banks are a key industry group in the finance sector but you'll also find insurance companies, brokerage firms, consumer finance providers and mortgage-related real estate investment trusts among finance. The standard & Poor's 500 index (S&P 500) is an unmanaged market-weighted index that includes 500 of the country's most important stocks from a wide variety of industries. All sectors (including the S&P 500 index) are classified within a heat map with green being the highest percentage and red the lowest percentage.

The S&P 500 represents approximately 80% of the total market value of all shares on the New York Stock Exchange. The Main Market Sectors page shows the performance of sectors and industries within the selected market. When you enter a symbol, a summary is displayed that shows all the sectors and the SIC code in which the symbol is located. The market ranks each of the ten sectors of the S&P for the selected time period (today, 5 days, 1 month, 3 months, 6 months, to date, 1 year, 5 years and 10 years) and shows its performance against the S&P 500 index. A 1-year graph of the S&P 500 index is shown at the top of the page showing percentage comparisons with the 11 sectors of S&P.It's important to understand how each sector contributes to overall performance when investing in stocks.

By staying up to date on global markets and stock sectors you can make informed decisions about your investments. Independent producers of renewable energy and electricity also reach the utility sector although they don't exactly resemble traditional regulated utilities in an era of deregulation.

Willis Pankiw
Willis Pankiw

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