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The S&P 500 logged the worst month since March 2020, plunging 5.3% in January. Rising bond yields in anticipation of the Federal Reserve’s tightening monetary policy took a toll on the stock market. SPDR S&P 500 ETF Trust (SPY - Free Report), the proxy version of the S&P 500 Index, has shed about 7%.

While most of the stocks in SPY’s portfolio are deep in red, a few have outperformed with energy stocks being the biggest gainers. We have highlighted stocks from various corners of the market that has gained in double digits. These include Halliburton (HAL - Free Report), Activision Blizzard (ATVI - Free Report), Discovery Inc. (DISCA - Free Report), Las Vegas Sands (LVS - Free Report), and Wells Fargo & Company (WFC - Free Report).

Current Trends

Fed Chair Jerome Powell, in the latest FOMC meeting, stated that "the economy no longer needs sustained high levels of monetary policy support," and that "it will soon be appropriate to raise rates.” The increase in interest rates will make borrowing expensive, driving up the cost of buying a new car or house or carrying credit card debt, and thus slow down economic growth. Resurging Omicron cases and high inflation continued to add to the chaos.

However, higher yields indicate investors’ optimism in the economy. A still-improving economy backed by job growth and higher consumer confidence will likely bolster risk-on trade. The U.S. economy expanded 5.7% annually in 2021, marking the fastest pace of growth since 1984 and a sharp reversal from the GDP contraction of 3.4% recorded in 2020. Increased U.S. consumer confidence suggests that the economy would continue to expand in 2022.

Additionally, the wider spread of vaccinations, new vaccines as well as solid corporate earnings bode well for the economy and the stock market.

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 7.1% 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, consumer discretionary, financials and communication services accounting for a double-digit allocation each.

SPDR S&P 500 ETF Trust has AUM of $403.7 billion and charges 9 bps in fees per year. The product trades in heavy volume of around 88.7 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.

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

Best-Performing Stocks of SPY

Halliburton is one of the largest oilfield service providers in the world, offering a variety of equipment, maintenance, and engineering and construction services to the energy, industrial and government sectors. The stock jumped 24.4% last month and accounts for a 0.07% share in the ETF.

Halliburton has an estimated earnings growth rate of 66.7% for this year, a Zacks Rank #3 (Hold) and VGM Score of A.

Activision Blizzard is a leading developer and publisher of console, online and mobile games. The company’s Call of Duty is one of the most popular gaming franchises globally. It makes up for 0.16% share in the fund’s basket and has gained 18.8% so far this year.

Activision Blizzard earnings are expected to decline 1.5% this year. The stock carries a Zacks Rank #5 (Strong Sell).

Discovery offers original and purchased content as well as live events to 3.8 billion cumulative subscribers plus viewers worldwide. Discovery shares has climbed 18.6% so far this year and accounts for 0.01% in the fund’s basket.

Discovery has an estimated earnings growth of 8.4% for this year and a Zacks Rank #4 (Sell). It carries a top Value Score of A.

Las Vegas Sands is a leading international developer of multi-use integrated resorts primarily operating in the United States and Asia. LVS has gained 16.4% and accounts for 0.04% in the fund’s basket.

Las Vegas Sands is expected to see earnings growth of 114.4% for this year and has a Zacks Rank #4.

Wells Fargo is one of the largest financial services companies in the United States, with more than $1.9 trillion in assets and $1.4 trillion in deposits as of Dec 31, 2021. The company provides banking, insurance, trust and investments, mortgage banking, investment banking, retail banking, brokerage services and consumer and commercial finance through 4,777 retail bank branches, broad automated telling machines (ATMs) network, the Internet, and other distribution channels across North America and globally.

Wells Fargo jumped 12.1% and its earnings are expected to decrease 21.2% for this year. The stock makes up for 0.56% of assets in SPY and has a Zacks Rank #3. Wells Fargo has a Momentum Score of A.