On a bad day for the market, the Nasdaq is trading down 1%, the S&P 500 is down 0.4% and the Dow has slipped 0.3%. The consumer cyclical sector is a category of stocks that relies heavily on the business cycle and economic conditions. Consumer cyclicals include industries such as automotive, housing, entertainment and retail. The category can be further divided into durable and non-durable sections. Durable cyclicals include physical goods such as hardware or vehicles, while non-durables represent items like movies or hotel services. The performance of consumer cyclicals is highly related to the state of the economy. They represent goods and services that are not considered necessities, but luxurious purchases. During contractions or recessions, people have less disposable income to spend on consumer cyclicals. When the economy is expanding or booming, the sales of these goods rise as retail and leisure spending increase.
The Consumer Cyclical sector (XLY) is down 0.3%, outperforming the market overall. Currently, the biggest movers in the sector are:
|Company||Market Cap||Percentage Change|
|Navistar (NYSE:NAV)||$1.45 billion||+7.9%|
|Tata Motors Limited (NYSE:TTM)||$2.58 billion||-3.4%|
|Sturm, Ruger (NYSE:RGR)||$855.5 million||+2.7%|
|Westport Innovations Inc (Nasdaq:WPRT)||$1.69 billion||-2.6%|
|True Religion Apparel (Nasdaq:TRLG)||$539.8 million||+2.5%|
|Tempur-Pedic International (NYSE:TPX)||$1.94 billion||+2.3%|
|G-III Apparel (Nasdaq:GIII)||$745.2 million||-2.1%|
Navistar (NYSE:NAV) is up 7.9% to reach a current price of $22.89 per share. The company is trading at a volume of 1.2 million shares. In technical analysis, trading volume is used to determine the strength of a market indicator.
Tata Motors Limited (NYSE:TTM) is down 3.4% to reach $25.91 per share. The company's volume is currently 385,235 shares for the day, 0.3 times its current daily average. Volume is an important indicator in technical analysis as it is used to measure the worth of a market move. If the markets have made a strong price move either up or down the perceived strength of that move depends on the volume for that period. The higher the volume during that price move the more significant the move.
Sturm, Ruger (NYSE:RGR) has moved up 2.7% and is currently trading at $45.84 per share. So far today, 162,591 shares have changed hands. If a stock price makes a big move up or down, volume lets us know the significance of that move.
At $29.93, Westport Innovations Inc (Nasdaq:WPRT) has slipped 2.6%. The company's volume is currently 562,615 shares for the day, in keeping with the average volume over the past three months. Price change alone is not enough to know how a stock is doing. Volume is an important secondary indicator used to confirm trends suggested by price movement.
Increasing 2.5%, True Religion Apparel (Nasdaq:TRLG) is trading at $21.46 per share. The company's volume for the day so far is 80,621 shares. This is on pace to fall short of yesterday's volume of 322,767 shares. A stock's volume conveys how excited investors are about it.
Tempur-Pedic International (NYSE:TPX) has risen 2.3% to hit a current price of $33.29 per share. At 485,600 shares, the company's volume so far today is 0.2 times the average daily volume. The trading volume for a stock indicates the level of investor interest.
After a decline of 2.1%, G-III Apparel (Nasdaq:GIII) has hit a share price of $36.42. This morning, the company is trading a volume of 31,949 shares. High volume indicates a lot of investor interest while low volume indicates the opposite.
The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. It is important to weigh current activity against historical performance when making any investment decisions. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.