S&P 500 Logs Worst Month of 2023: 5 Stocks Still Up in ETF

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The S&P 500 witnessed its worst month of 2023, losing 5% in September. With this, 2023 marked the fourth year in a row that the S&P 500 logged losses in September, per data from Deutsche Bank.

Fears of higher rates for a longer-than-expected period took the sheen away from stocks in the month. SPDR S&P 500 ETF Trust SPY, the proxy version of the S&P 500 Index, shed 3.1% last month. Despite the losses, some stocks in the ETF stood tall.

We have highlighted five stocks that are in green and have a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). These include Centene Corporation CNC, WestRock WRK, CF Industries Holdings Inc CF, Valero Energy VLO and Charter Communications CHTR.

The Fed, in its latest meeting, kept interest rates steady at a 22-year high, in the range of 5.25% to 5.5%, but signaled one more hike this year. Though inflation is easing, it remains elevated and above the Fed’s 2% target.

Meanwhile, the latest bouts of weak economic data have sparked fears of a slowdown. U.S. consumer sentiment slipped for the second straight month in September as the University of Michigan’s preliminary reading of its Consumer Sentiment Index dropped to 67.7 from the final reading of 69.5 in August. Meanwhile, new home sales declined 8.7% in August from July and home prices continued to ascend, with the Case-Shiller Index growing 1% year over year in July.

Further, the combination of a steadily appreciating U.S. dollar, escalating yields, and surging oil prices presents a trio of challenges that could potentially impede the long-term performance of corporate America and the broader economy, posing concerns for investors. In fact, surging oil prices threaten to revive inflationary pressure. Moreover, Wall Street is grappling with global economic uncertainties, U.S. auto workers’ strike that may intensify inflation, and the reinstatement of U.S. student loan repayments that could impact household spending.

Let’s take a closer look at the fundamentals of SPY.

SPY in Focus

SPDR S&P 500 ETF Trust holds 503 stocks in its basket, with each accounting for no more than 7% of the assets. This suggests a nice balance across each security and prevents heavy concentration. The fund is widely spread across sectors with information technology, healthcare, financials and consumer discretionary accounting for a double-digit allocation each.

SPDR S&P 500 ETF Trust has AUM of $402 billion and charges 9 bps in fees per year. The product trades in a heavy volume of around 67 million shares a day on average, ensuring higher liquidity with a tight bid/ask spread, leading to lower trading costs for investors. SPY has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

Below, we have highlighted the abovementioned five best-performing stocks in the ETF.

Best-Performing Stocks of SPY

Centene is a well-diversified healthcare company that primarily provides a set of services to government-sponsored healthcare programs. The stock surged more than 12% last month. It has an estimated earnings growth rate of 11.8% for this year.

Centene makes up for 0.10% of the assets in SPY and has a Zacks Rank #3.

WestRock is a multinational provider of paper and packaging solutions for consumer and corrugated packaging markets. The stock gained about 9% last month and accounts for 0.02% of the total assets.

WestRock saw a positive earnings estimate revision of 22 cents for the fiscal year (ending September 2024) and has a Zacks Rank #1.

CF Industries is one of the largest manufacturers and distributors of nitrogenous fertilizer and other nitrogen products globally. The stock has risen about 8% and makes up 0.05% of the SPY portfolio.

CF Industries saw no earnings estimate revision over the past 30 days for this year but its earnings are expected to decline 54%. It has a Zacks Rank #3.

Valero Energy is the largest independent refiner and marketer of petroleum products in the United States. The stock has risen about 6% and makes up for 0.14% of the SPY portfolio.

Valero Energy saw a solid earnings estimate revision of $12.3 over the past 30 days for this year and has a Zacks Rank #3.

Charter Communications is the second largest cable operator in the United States and a leading broadband communications company providing video, Internet and voice services. The stock was up 4% last month and accounts for a 0.12% share in the SPY portfolio.

Charter Communications saw a negative earnings estimate revision of 6 cents over the past 30 days for this year and has estimated growth of 1.7%. It has a Zacks Rank #3.

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Valero Energy Corporation (VLO): Free Stock Analysis Report

CF Industries Holdings, Inc. (CF): Free Stock Analysis Report

Charter Communications, Inc. (CHTR): Free Stock Analysis Report

SPDR S&P 500 ETF (SPY): ETF Research Reports

Centene Corporation (CNC): Free Stock Analysis Report

WestRock Company (WRK): Free Stock Analysis Report

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