Live Markets: Defensive stocks gain as investors play it safe

Pinnacle West Capital

20/02/2024 18:23

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      Nasdaq down 1.4%, S&P 500 off > 0.8%, Dow off 0.2%
    

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      Tech weakest S&P 500 sector; staples lead gainers
    

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      Euro STOXX 600 index closed down ~0.1%
    

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      Dollar dips, bitcoin off 1%, crude edges up; gold gains
0.5%
    

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      U.S. 10-Year Treasury yield falls to ~4.26%
    

  
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  DEFENSIVE STOCKS GAIN AS INVESTORS PLAY IT SAFE
    Defensive stocks, including those in the consumer staples
and utilities sectors, were gaining ground on Tuesday as
investors sought shelter amid a broader pull back in markets.
    Buoyed by strong fourth quarter results, shares of Walmart
Inc  WMT.N  were one of the top gainers on the S&P 500 consumer
staples index  .SPLRCS , which was up 1.2%, even as Wall
Street's three main indexes were trading lower. 
    Meanwhile, the S&P 500 utilities index  .SPLRCU  was also up
0.2%, led by gains in Southern Co  SO.N , Pinnacle West Capital
Corp  PNW.N , and PG&E Corp  PCG.N .
   Investors move into defensive stocks, which offer reliable
dividends and earnings, when they are nervous about markets,
said Thomas Hayes, chairman of hedge fund Great Hill Capital.
    "All the defensives - staples, utilities and bonds - are up
and that's where you hide when there's a pullback" Hayes said in
an interview with Reuters. "There's a little bit of a move to
safety today and part of it is that Nvidia, which has been
risk-on, is down today. So these are all risk-off plays," he
added.
    Tom Plumb, CEO of Plumb Funds, concurs, saying there's a
"classic rotation" into defensives, particularly consumer staple
stocks. 
    "These are companies that have been very stable and are
trading at 20 times earnings, which is not really cheap but
they've not been the sexy participants here in the market. So
it's a classic rotation," Plumb said in an interview with
Reuters.
    (Chibuike Oguh)
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