Richmond Fed Manufacturing Index Impacts SPY and Industrial Stocks
(Continued from Prior Part)
Top stocks
On December 22, the stocks at the top of the SPDR S&P 500 ETF (SPY) were Allegheny Technologies (ATI), Joy Global (JOY), and Denbury Resources (DNR). These stocks gained 12.0%, 8.0%, and 7.9%, respectively, on the day.
The above graph compares the stock price movements of Allegheny Technologies with Nucor (NUE) since October 2015.
The value of beta for Allegheny Technologies is 1.38. It’s 1.08 for Nucor. Therefore, Allegheny is more sensitive to broad market movement than Nucor. Allegheny traded at $11.93. It was below its moving averages. Allegheny’s 100-day, 50-day, and 20-day moving average values are $16, $14, and $12, respectively. Analysts’ stock price target for Allegheny is set at $19.67. This suggests an upward growth potential of 65%.
Due to the strong Richmond Fed Manufacturing Index report, the ARCA Steel Index (^STEEL) rose by 3.5% on Tuesday, December 22. Also, other industrial metals rose on the day that boosted the material sector. Allegheny and Nucor are into iron mining and steel production. As a result, the mining stocks rose on December 22. Nucor rose by 3.5% on the day.
Joy Global (JOY) rose because of the upbeat manufacturing index report. Denbury Resources (DNR) rose due to the slight rise in US crude oil’s price.
Bottom stocks
On December 22, the socks at the bottom of SPY were Chipotle Mexican Grill (CMG), NetApp (NTAP), and Genworth Financial (GNW). These stocks yielded -5.3%, -5.0%, and -3.1%, respectively, on the day.
Chipotle Mexican Grill’s woes continued after the CDC (Centers for Disease Control and Prevention) confirmed on Monday, December 21, that it’s investigating another outbreak of E. coli last month. The outbreak is related to Chipotle Mexican Grill. Citing the investigation regarding the food safety issues, JPMorgan Chase downgraded the stock from “overweight” to “neutral.”
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