Defense, Energy & Semiconductors ETFs Leading the Market

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July 26, 2016 12:50pm NASDAQ:ADI NASDAQ:BEAV

winnersThere are three areas of the market bucking the early selling we have seen today. Particular investor interest thus far in the three areas of the market that continue to outperform: energy, semiconductors, and defense contractor-related companies.


Energy Up, Despite Oil’s Decline

The energy gains today we are seeing are tied to this morning’s results out of Valero Energy Corporation (NYSE:VLO). The company beats EPS estimates by $0.08 and also beat on revenues. The stock is currently up 2.78% to $51.69. The results are also helping lift its peer competitors like Tesoro Corporation (NYSE:TSO) and Devon Energy (NYSE:DVN). On the ETF side, we are watching the SPDR S&P Oil & Gas Exploration & Production ETF (NYSE:XOP) spike higher by 1.17% to $33.71. XOP is now up 11.58% year-to-date.

Defense is the Best Offense

The gains in the defense sector we are seeing are as a result of earnings beats from B/E Aerospace Inc. (NASDAQ:BEAV) and United Technologies Corporation (NYSE:UTX). Aircraft cabin maker B/E Aerospace beat EPS estimates by $0.02 and also beat on revenues, pushing the stock higher by 6.55% to $48.51. Meanwhile defense giant United Technologies smashed EPS estimates by $0.14 and easily beat on revenues. This brings the iShares US Aerospace & Defense ETF (NYSE:ITA) in focus. For the day, ITA is currently up 1.06% to $129.25 and year-to-date up 9.27%. Some analysts would point to election year chatter as well as global turmoil for the consistent investor interest in defense plays.

Semis Continue to Outperform

Finally, the semiconductor space is enjoying a solid day of gains following the earnings news out of Texas Instruments Inc. (NASDAQ:TXN). The semiconductor chip giant beat EPS numbers by $0.04 and also beat on revenues. Wall Street analysts didn’t waste any time in price targets, with $82 being the street high target we got from Drexel Hamilton. Shares of Texas Instruments are currently up 7% to $70.86. Other names seeing a lift include Analog Devices Inc. (NASDAQ:ADI) and NXP Semiconductors NV (NASDAQ:NXPI), which are up 2.36% and 2.76% respectively today. The ETF seeing a nice boost from the earnings news is iShares PHLX Semiconductor ETF (NASDAQ:SOXX), up 1.62% to $102.77. Year-to-date, SOXX is up 14.37%.

Update: Late-day headlines are crossing in regards to chatter Analog Devices may be in talks to acquire Linear Technology Corporation (NASDAQ:LLTC)

It’s not surprising these three areas of the market are outperforming today as these sectors have continued to outshine much of the other sectors we follow since the start of 2016.


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