On a dreary day for U.S. stocks, just seven exchange traded funds made new 52-week highs to this point in Friday’s session. Just two have made new all-time highs.
The Materials Select Sector SPDR (NYSEArca: XLB) is found in both groups. XLB, home to $5.15 billion in assets under management, is trading modestly higher today as shares of LynondellBasell (NYSE: LYB) race higher by nearly 5%. LynondellBasell, XLB’s fourth-largest holding at a weight of 6.9%, reported second-quarter earnings per share of $2.22, well above Wall Street estimates of $1.92.
“LyondellBasell said Q3 industry conditions have so far been similar to Q2, and the strength of American oil, natural gas and natural gas liquids production will support margins,” according to Investor’s Business Daily.
Up 17% in the past 90 days, LyondellBasel reached an all-time high today, but the stock has not been the only contributor to XLB’s recent bullishness. The largest materials ETF entered Friday with a 2014 gain of 9.2%, making it the fifth-best of the nine sector SPDR ETFs.
XLB has been boosted by the materials sector’s status as a late-cycle and value destination. Chemicals stocks have been key drivers of the recent upside accrued by materials ETFs. XLB is up 6.3% over the past 90 days as shares of Dow Chemical (NYSE: DOW) are up 11% over the same period. XLB has also fought off weakness in DuPont (NYSE: DD), which has fallen 2.2% over that time. Dow and DuPont combine for 20.2% of XLB’s weight. [Resurgent Materials ETFs]
XLB is flirting with a gain of 1% for July. The ETF’s decent showing in the seventh month of the year is not surprising because XLB is, historically, the best of the nine SPDRs in July. A gain of 1% would fit with XLB’s average July return dating back to 1999. [Sector Ideas for July]