NEW YORK (AP) This week, Wall Street experienced a predominantly negative trend with most stocks showing red figures. However, certain sectors, particularly those related to food, health care, and essential services, managed to gain traction despite an overall slump in the stock market caused by concerns over an escalating trade war. This trade conflict has wiped out trillions of dollars in market value for many major U.S. corporations, with significant losses reported among Big Tech stocks, specialty retailers, travel, and energy companies.
In response to economic uncertainties, many investors shifted their focus towards companies that tend to remain stable during economic downturns. The rationale behind this move is simple: people continue to need basic necessities such as healthcare, food, soap, toilet paper, and utilities, even in financially challenging times. Bill Adams, the chief economist for Comerica Bank, explained it by saying, “The market is pricing in a big hit to the broad economy from tariffs cutting into corporate profits, hurting hiring, and curtailing consumer spending.”
A closer look reveals that certain companies have excelled this week despite the broader market challenges:
Food Sector
Companies in the food sector, including grocery chains and restaurants, are bracing for higher costs associated with imported goods. Food expenses are generally non-negotiable in household budgets. Notable gainers include:
- Conagra, up 2.8%
- General Mills, up 3.5%
- Hormel Foods, up 4%
Personal Care and Household Items
Similar to food, personal care products and household essentials are difficult to eliminate from budgets. Brands offering soap, toothpaste, and laundry detergent are expected to face increased costs, which will likely be passed on to consumers. Gainers in this sector are:
- Church & Dwight, up 2.7%
- Procter & Gamble, up 1.4%
- Clorox, up 1.9%
Utilities and Essential Services
Utility companies, which provide electricity and gas, are typically more resilient during economic downturns. Expenses for utilities are considered essential and cannot be avoided. This week, the following companies experienced gains:
- Exelon, up 5%
- American Tower, up 5.9%
- Consolidated Edison, up 3.8%
- American Water Works, up 4.3%
- Waste Management, up 2%
Health Care
The health care sector continues to be a safe haven for investors. Businesses involved in hospital operations, insurance, and other health-related services are essential, leading to gains among companies like:
- Molina Healthcare, up 10.5%
- Centene, up 7.5%
- UnitedHealth Group, up 6.2%
- HCA Healthcare, up 1.2%
Groceries and Retailers
Grocery stores and large retailers with significant grocery sections have shown resilience. Discount retailers benefit when consumers reduce spending. This week’s highlights include:
- Kroger, up 5.4%
- Costco, up 3.2%
- Dollar General, up 13%
- TJX Companies, up 8.5%
Fast Food
Despite economic challenges, spending can shift from more expensive dining options to affordable fast food and casual dining. This week, fast food chains showed mixed results:
- McDonald’s, up 1.7%
- Domino’s, down 1.7%
- Yum Brands, down 0.7%
Beverages
Consumers often redirect spending on food and drink from dining out to home consumption during economic hardships. Despite warnings from beer and soft drink producers regarding the negative impact of tariffs, larger companies have drawn some investor attention:
- Molson Coors Beverage, up 3.7%
- Coca-Cola, up 1.4%
- PepsiCo, up 1%
- Monster Beverage, up 1.9%
