DJ Coca-Cola and Other Stodgy Stocks Are Back in Fashion as the Rest of the Market Tanks -- Barrons.com
By Andrew Bary
So much for the so-called internet staples. Investors now want the real thing.
Often derided as stodgy and slow-growing, consumer stocks like Coca-Cola (ticker: KO), PepsiCo (PEP), and Procter & Gamble (PG) have held up well lately as the stock market selloff has intensified, with some key indexes falling into the red for the year. Other traditionally defensive groups like utilities and real estate investment trusts also have bested the overall market lately.
Coca-Cola hit a new 52-week high Tuesday at $50.82, but has since fallen and is now off 50 cents to $50.01. Coke now is up 9% so far this year after rallying the past month. PepsiCo is off 75 cents to $118.26, but is up about 7% in the past month, and Procter & Gamble is off 43 cents to $92.86 after rising 6% in recent weeks. Both P&G and Pepsi are close to their 52-week highs.
In the tech sector, marquee internet stocks have stabilized Tuesday after sharp recent declines. Amazon.com (AMZN) is up $6.71 to $1,519, Alphabet (GOOG) is up $3.97 at $1,023.97, and battered Facebook (FB) has gained $2.13 to $133.68. Some analysts have taken to calling Facebook, Amazon, and Alphabet "the new staples" given their dominant market positions and growth outlooks.
The Utilities Select Sector SPDR ETF (XLU) is off 16 cents to 54.96 after opening higher. The bellwether utilities ETF is up 8% this year and is close to its 52-week high. The Vanguard Real Estate ETF (VNQ), the leading REIT ETF, is off $0.39 at $80.51 and is about flat for the year. Marquee telecom stock Verizon Communications (VZ) hit a new 52-week high of $61.57 earlier Tuesday and now is off 71 cents at 59.91. Verizon has been one of the strongest mega-cap stocks lately and now is up 13% this year.
REITs and utilities are drawing strength from the Treasury bond market, which is slightly higher Tuesday as investors continue to ratchet down growth expectations for the economy and potential further tightening by the Federal Reserve.
The S&P 500 is down about 30 points, or 1.2%, to 2,660 and the Dow Jones Industrial Average is off 358 points at 24,659. The Nasdaq Composite is off 52 points at 6,976, All three indexes have rallied from their worst levels of the morning. The Dow Industrial now are down 0.2% this year while the S&P 500 is off 0.3% and the Nasdaq has moved back into the black for year with a 1% gain.
Write to Andrew Bary at andrew.bary@barrons.com
(END) Dow Jones Newswires
November 20, 2018 11:53 ET (16:53 GMT)
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