Another beaten-up sector has a tendency to perform well in February. The Materials Select Sector SPDR (NYSEArca: XLB), also a laggard in 2014 though not to the degree XLE was, is usually the second-best of the nine SPDRs in February with an average gain of nearly 1%, according to CXO data.
XLB lost 2.8% in January. Interestingly, the materials sector’s fortunes have been linked to oil prices, which is to say the combination of lower oil prices and a strong dollar has crimped XLB’s performance. In theory, materials stocks should be winner in a low energy price environment because lower oil and gas prices reduce input costs for energy-intensive materials producers and chemicals manufacturers. In reality, that has not been the case. [Materials ETFs Stung by Falling Oil Prices]
On a historical basis, the Technology Select Sector SPDR (NYSEArca: XLK) and the Financial Select Sector SPDR (NYSEArca: XLF) are the two worst of the nine SPDRs in February, posting an average loss of about 2%. XLK and XLF lost 4.6% and 8%, respectively, last month.
Energy Select Sector SPDR
