Financials Lead?

by: Bill Zimmer Thursday, February 25th, 2010 at 10:44 am

Last evening while reading market wrap information from around the net I stumbled upon Market Talk a Dow Jones Blog with the following headline: Financials Lead As Stocks Rebound I thought that a very interesting comment because I had already looked over the Morningstar Sectors and Financials were not the leader.

Sorting the Sectors by best gain to worst for the day [just a click on the heading]; Retail, Automotive, and Leisure were your leaders. Banking was in 10th place out of 31 sectors for yesterdays advance.

However if we look at indexes and pull up the same screen for Index Data; Bingo

The KBW Bank Index has 24 component issues you can check HERE! Is it a good benchmark or is Morningstar better?

Switching over to the Sector Composite information:

I see that the Morningstar Banking Sector contains 545 stocks as opposed to the 24 in the KBW index.  Morningstar is a much broader based look at the Banking Sector.

Above is the Morningstar Banking Sector.  If you pull up a BKX chart you’ll notice a very similar picture. Conclusion: Banks did not lead yesterday IMHO!