5 Stocks That Powered S&P 500 ETF Last Week

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The S&P 500 wrapped up its best week since Nov 6, climbing 4.6% on renewed optimism in the markets. This is especially true against the backdrop of better-than-expected Q4 earnings and hopes of more stimulus.

Notably, upbeat Q4 earnings have led analysts’ to raise their estimates for the coming quarters. Earnings growth for Q4 has turned modestly positive, following three straight quarters of decline, thanks to impressive results from the tech sector leaders. Meanwhile, the Senate has passed a budget resolution, allowing Congress to continue its quest toward passing a $1.9 trillion coronavirus stimulus bill. The package includes $1,400 stimulus checks, a supplemental jobless benefit, and COVID-19 vaccine and testing funds.

Additionally, a disappointing January jobs report has raised the likelihood of further stimulus. Further, easing of a surge in coronavirus cases and accelerating pace of vaccinations is providing huge support to the S&P 500.

Against such a backdrop, the proxy version of the S&P 500 Index, SPDR S&P 500 ETF Trust (SPY - Free Report), also gained 4.8% last week. Let’s take a closer look at the fundamentals of SPY and its best stocks:

Inside the SPY

The ETF holds 505 stocks in its basket with each accounting for no more than 6.7% 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, consumer discretionary, communication services, and financials accounting for a double-digit allocation each. It has AUM of $324.7 billion and charges 9 bps in fees per year. The product trades in heavy volume of around 56 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 #3 (Hold) with a Medium risk outlook. Though most stocks in the fund’s portfolio were in the deeper green last week, we have highlighted five stocks that led the rally:

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Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any ...

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