DJ Defensive Stocks Power Ahead as the Dow Plummets -- Barrons.com

By Andrew Bary

Defensive stocks are having their day in the sun as the broader market plunges.

Utilities stocks were bucking the downdraft Tuesday, with the leading utility exchange-traded fund hitting a new 52-week high. Other traditionally defensive groups, such as consumer and telecom stocks, as well as real-estate investment trusts, were holding up better than the overall market, too.

The Dow Jones Industrial Average was off 638 points, or 2.5%, at midafternoon to 25,188 while the S&P 500 index was down 67 points, or 2.4%, to 2,723.

The Utilities Select Sector SPDR ETF (ticker: XLU) has risen 38 cents to $56.53 after hitting a new 52-week high of $56.81, leaving it up 10% so far this year. Among leading electric utilities, NextEra Energy (NEE) has risen 96 cents to $183.45 after hitting a new 52-week high earlier Tuesday. Duke Energy (DUK) rose 85 cents to $90.47 after also reaching a new 52-week high.

With their regulated businesses and returns, as well as above-market dividend yields, utilities are a traditional haven in rocky markets. The Utilities Select Sector SPDR ETF yields 3.2%, against about 2% for the S&P 500.

Utilities, however, aren't cheap now. Duke trades for 19 times projected 2018 earnings and NextEra commands 23 times.

Verizon Communications (VZ), which lately has gained when the overall market has struggled, was doing that again Tuesday. The stock was up 17 cents to $58.33.

The Consumer Staples Select SPDR ETF (XLE) fell 48 cents to $55.83 and the Vanguard Real Estate ETF (VNQ) declined 71 cents to $81.71. Both declines were less than 1% -- better performances than the overall market. Reflecting the relative strength in consumer stocks, Coca-Cola (KO) was up 12 cents to $49.82.

Write to Andrew Bary at andrew.bary@barrons.com

(END) Dow Jones Newswires

December 04, 2018 15:17 ET (20:17 GMT)

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