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5 Stocks in S&P 500 ETF That Led the Rally Last Week


The S&P 500 logged in its best week of the year, jumping 6.5% and wiping out its losses in May, thanks to a slew of upbeat earnings results and an encouraging economic data. SPDR S&P 500 ETF Trust SPY, the proxy version of the S&P 500 Index, has plunged about 12.3%.

While most of the stocks in SPY’s portfolio have risen, we have highlighted five stocks from various corners of the market that have gained in double digits last week. These include Dollar Tree DLTR, DXC Technology Company DXC, Constellation Energy Corporation CEG, AutoZone Inc. AZO and Generac Holdings GNRC. All these stocks have a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold).

The gains came basically in the last two days of the week as strong retail earnings and a slowing inflation report lifted investors’ sentiment. Notably, robust earnings from Ulta Beauty ULTA and Gap GPS infused optimism into the retail sector. Meanwhile, an inflation gauge closely tracked by the Federal Reserve rose 6.3% year over year in April, just below a four-decade high set in March and the first slowdown since November 2020.

Further, the Fed minutes rekindled some interest in the stock market as there were no surprises. The minutes showed that the central bank will continue raising interest rates by a half-percentage point each in June and July to combat surging inflation and to avoid an economic downturn (read: Fed Minutes Rekindle Optimism: 5 ETFs That Surged the Most).

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

SPY in Focus

SPDR S&P 500 ETF Trust holds 505 stocks in its basket, with each accounting for no more than 7% of 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 $365.5 billion and charges 9 bps in fees per year. The product trades in a heavy volume of around 90 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 #2 (Buy) with a Medium risk outlook (see: all the Large Cap Blend ETFs here).

Below we have highlighted the above-mentioned five best-performing stocks in the ETF.

Best-Performing Stocks of SPY

Dollar Tree is an operator of discount variety stores offering merchandise and other assortments. The stock soared 29% last week and accounts for a 0.1% share in the ETF.

Dollar Tree has an estimated earnings growth rate of 36.7% for the fiscal year (ending January 2023). It has a Zacks Rank #3 and VGM Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.

DXC Technology provides information technology services and solutions primarily in North America, Europe, Asia and Australia. It makes up for a 0.02% share in the fund’s basket and gained 18.5% last week.

DXC Technology’s earnings are expected to grow a massive 14.3% for the fiscal year (ending March 2023). The stock carries a Zacks Rank #3 and has a VGM Score of B.
 
Constellation Energy generates and sells electricity in the United States. The stock climbed 17.6% last week and accounts for 0.06% in the fund’s basket.

Constellation Energy saw positive earnings estimates revision of 8 cents over the past 30 days for this year and a Zacks Rank #3. It carries a top VGM Score of A.

AutoZone is one of the leading specialty retailers and distributors of automotive replacement parts and accessories in the United States. The stock gained 16% last week and accounts for 0.12% in the fund’s basket.

AutoZone is expected to see earnings growth of 20.5% for the fiscal year (ending August 2022) and has a Zacks Rank #3. It has a solid VGM Score of B (read: 4 Top-Ranked Sectors & Its ETFs to Play Amid Market Slump).

Generac Holdings is a leading manufacturer of power generation equipment, energy storage systems and other power products, including portable, residential, commercial and industrial generators.

Generac Holdings jumped 16% and its earnings are expected to increase 21.7% for this year. The stock makes up for 0.04% of assets in SPY and has a Zacks Rank #3. Generac Holdings has a Momentum Score of A.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Constellation Energy Corporation (CEG) : Free Stock Analysis Report
 
Dollar Tree, Inc. (DLTR) : Free Stock Analysis Report
 
The Gap, Inc. (GPS) : Free Stock Analysis Report
 
Ulta Beauty Inc. (ULTA) : Free Stock Analysis Report
 
AutoZone, Inc. (AZO) : Free Stock Analysis Report
 
SPDR S&P 500 ETF (SPY): ETF Research Reports
 
Generac Holdings Inc. (GNRC) : Free Stock Analysis Report
 
DXC Technology Company. (DXC) : Free Stock Analysis Report
 
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