The Fed's Dovish Rate Hike Causes US Equities to Surge

(Continued from Prior Part)

Stocks at the top of the SPDR S&P 500 ETF (SPY) on December 16, 2015, were First Solar (FSLR), Windstream Holdings (WIN), and Joy Global (JOY). These stocks rose 9.7%, 6.2%, and 6.1%, respectively, on the day.

The above graph presents the stock price movements of Windstream Holdings and its peer company Frontier Communications (FTR) since October 2015.

Telecommunication stocks were buoyed on December 16, with Windstream and Frontier rising 6.2% and 4.9%, respectively.

The beta values for WIN and FTR are 0.78 and 0.92, respectively. A beta value of less than 1 implies a less-volatile stock. WIN’s trailing-one-month return was 11.2%, while FTR’s was -0.4%.

WIN traded at $6.35 on December 16, above its 100-day, 50-day, and 20-day moving averages of $6, $6, and $6, respectively. The analyst stock price target for WIN is set at $7.63, suggesting an upward growth potential of 20%. The stock has four “buy,” eight “hold,” and four “sell” recommendations. S&P rates the stock as a “B+” with a “stable” outlook.

FSLR surged nearly 10% on December 16. Solar stocks have been heavily traded since the United States announced that it would target lower greenhouse gas emissions at the recent United Nations Climate Change Conference in Paris on December 12, 2015. The international climate change deal that was accepted by 195 countries over the weekend created a demand for alternative energy sources such as the sun and wind.

FSLR, being a provider of alternate energy sources, emerged as an attractive investment. For more information, read First Solar Clinches Top SPY Position.

Joy Global rose as its earnings and revenue beat market expectations.

Stocks at the bottom of SPY on December 16 were Denbury Resources (DNR), Pioneer Natural Resources (PXD), and Marathon Oil (MRO). These stocks fell -8.7%, -7.0%, and -4.7%, respectively, on the day. All these stocks belong to the oil and gas producing companies whose performances were marred by the plunge in oil prices owing to the oil supply glut.

To read more about US equities, visit Market Realist’s US Equity ETFs page.

Browse this series on Market Realist:

• Part 1 - The Fed’s Long-Awaited Decision to Raise Rates Sent SPY Soaring
• Part 2 - Crude Inventories Pull Energy Sector Down, Utilities Soar