3 Stocks Set To Soar With A Rise In Consumer Spending

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The S&P 500 looked to break a three day skid, but finished a touch lower to make it four days in a row. Investors appear concerned over rising rates over the short-term, but are optimistic for an improving economy and a stimulus bill. That bill should increase consumer spending and benefit stocks such as PPG Industries (PPG), Snap-on Incorporated (SNA), and Timken Company (TKR).

Stocks ended the week mixed, with only the Nasdaq composite index closing positive for the day. The S&P 500 was poised to snap its longest losing streak of the year, which was three days, but a small loss makes it four in a row. Investors appear pleased with Treasury Secretary Janet Yellen’s push for more stimulus, yet continue to be concerned with rising rates.

Yields are rising as the economy seems to be improving, and more stimulus will provide another injection of support. It’s not a question of if, but when the new bill is passed and signed by the President. The stimulus package should drive stocks higher, especially consumer-facing cyclical stocks. With more money in the bank, I expect people to spend more which should benefit companies whose success is tied to consumer spending, such as PPG Industries (PPG - Get Rating), Snap-on Incorporated (SNA - Get Rating), and Timken Company (TKR - Get Rating).

But before I get into evaluating those stocks, let’s take a look at the recent performance of the markets.

Market Commentary

Stocks in all three major indexes were trading higher this morning after Treasury Secretary Janet Yellen pushed for more stimulus yesterday. But the indexes soon reversed course to end the day with very little change from yesterday’s session, in what has been in line with choppy trading over the past few days.

After hitting a record high on Tuesday, the S&P 500 has been trending downward over the past few days as investors have become more concerned with elevated valuations and rising bond yields. The 10-year Treasury yield rose to 1.34% today, up from 1.29% yesterday and 1.09% at the beginning of February. There are also concerns about rising inflation that seems to be spooking investors.

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