Stock Market Turns Cautious as ‘Defensive’ Shares Surge
Some of the hottest stocks in the U.S. are pointing to an economic cool-down.
Utilities and healthcare are among the best-performing groups in the S&P 500 so far this quarter, with gains of 7.8% and 6.6%, respectively, compared with a 4.9% rise in the broad stock index. Big winners include utility NextEra Energy Inc., which is up 14% this quarter, while shares of medical company Danaher Corp. are up 19%.
The gains are noteworthy because investors typically pile into those types of stocks when they are expecting the outlook to darken. Visits to the doctor and electricity use are less apt to decline in a pinch than spending on vacations or new furniture. Goldman Sachs this month cut its third-quarter U.S. economic growth forecast to 5.5% from 9%, citing slowing consumer spending in the face of renewed Covid-19 outbreaks.
A drop in economic…