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Sectors

Utilities, Services Tops Wednesday Sectors

October 15
6:00 AM 2016

Peeking at the sectors which fared best as of Midday Wednesday, stock shares of Utilities companies outplay other sectors, it goes higher by 1.0%. Among that group, WEC Energy Group Inc. (WEC) and Ameren Corp. (AEE) are the tough companies, in which these two are the day's stand-outs, presenting a gain of 1.5% and 1.5% respectively, both are tie in the rank for they got same gain.

Market capitalization is a significant data point for investors to keep track of it for many reasons. The most fundamental reason is that it gives a truthful comparison of the value attributed by the stock market to a given company's stock. Several investors who have just started look at one stock trading at $10 and another trading at $20 and mistakenly think the latter company is worth twice as much which is of course is a futile and meaningless comparison without comprehending how many shares of each company exist. Yet, comparing market capitalization provides a true comparison of the value of two stocks.

Among the utilities ETFs, one of the ETF which followed the sector is the Utilities Select Sector SPDR ETF (XLU) which leap up to 1.0% on the day and rise up to 12.35% year-to-date. Meanwhile, WEC Energy Group INC. is jumps up to 14.86% year-to-date. On the other hand, Ameren Corp. goes up to 12.99% year-to-date. Integrated, WEC and AEE come up with a nearly 5.1% of the fundamental holdings of XLU.

The second best achieving sector is the Services sector which goes higher by 0.8%. Among huge Services stocks sectors, Kroger Co (KR) and Best Buy Inc. (BBY) are the most significant remark showing a gain of 4.2% and 3.9 respectively. One of the ETF which closely bring to light is the iShares U.S. Consumer Services ETF which rise up to 0.8% in the midday trading. It goes up 1.67% gain on a year-to-date basis.

Meanwhile, Kroger Co. (KR) is down 24.22% year-to-date. While Best Buy Inc. (BBY) leaps up to 35.02% year-to-date. Joining KR and BBY, the two comes up with relatively 1.4 of the latent holdings of IYC.

Indeed, market capitalization is essential for the result on Wednesday tells  where a company places in terms of its size tier in relation to peers. For it can have a direct impact on which indices will include the stock, and which mutual funds and ETFs are willing to own the stock.

A mutual fund for instance, which concentrated solely on Large Cap stocks may for example only be interested in those companies sized $10 billion or larger. One more significant and illustrative example is the S&P MidCap index which essentially takes the S&P 500 index and "tosses out" the biggest 100 companies so as to focus solely on the 400 smaller "up-and-comers".

 Such ETFs which directly follow an index like the S&P 500 will only own the latent element of that index, selling companies that lose their status as an S&P 500 company. Thus, investors will be interested to buy firms when they are added to the index.

Therefore, a company's market cap, especially in relation to other companies, transport great importance. For this reason, investors should find value to put together these results at relative market capitalization every day.

 

 

 

 

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