A Rotation Into Defensive Stocks? Market Strength Seen In Consumer Defensive And Healthcare On Tuesday

The U.S. stock market is seeing some modest selling on Tuesday morning after a series of largely uneventful sessions last week. Two hours into the trading day, the S&P 500 was down around 0.75% and the Nasdaq had pared 0.90%. In a market that has been attracting a good deal of pessimistic headlines, and has been struggling for direction in recent weeks, a more intense sell-off from levels that remain near year-to-date highs could potentially even materialize as early as the coming hours. Nevertheless, broad-based strength is being seen in the consumer staples and healthcare sectors. Overall, this is the type of technical rotation that could be a harbinger of a renewed bout of weakness in the stock market as traders seem to be rotating into defensive names early on Tuesday. 

Healthcare 

Eli Lilly And Co LLY – Shares are off of their best levels for the session, but were last trading up 0.69% to $386.00 in an overall declining U.S. stock market as of this writing on Tuesday morning. On a short and long-term basis, LLY is quite an interesting name. The stock is sitting at all-time high levels and the bullish technical picture for LLY is very much intact. Over the last month, shares have added better than 15%. Year-to-date, the stock has largely tracked the S&P, gaining about 6%, with momentum really picking up in the near term. The last 52 weeks, however, have seen LLY shares climb 35% and on the 5-year chart, the pharmaceutical giant’s shares have surged almost 370%. 

Johnson & Johnson JNJ – The healthcare giant’s stock was last trading up a little less than 1% to just under $165.00. JNJ shares have climbed slightly above a descending trend line as of this writing on Tuesday. 

United Health Group UNH – The stock has climbed around 1% on Tuesday morning to just below $494.00. Year-to-date, UNH has been largely range-bound, and underperformed the S&P, notching a loss of roughly 5%.

Centene Corp CNC – The St. Louis-based managed care company reported positive first-quarter earnings on Tuesday morning, sending the stock up nearly 3% to $69.50. Centene has been a loser over the last year, but near-term momentum has picked up, with shares adding over 7% during the last month.  

AbbVie Inc. ABBV – The strength in big-cap healthcare names on Tuesday has sent shares of AbbVie a little less than 1% higher to $165.46. The pharmaceutical giant’s stock is sitting within shouting distance of all-time highs and could be a defensive name to continue to watch. Shares also sport an attractive dividend yield above 3.50%. 

Consumer Staples  

PepsiCo PEP – Pepsi stock has jumped better than 2% after the global food and beverage company reported its Q1 earnings results. On any timeframe, PEP has always been a terrific stock and both traders and investors may want to take a close look at this name in the wake of its most recent earnings report. The stock is now trading at a new all-time high and technical momentum could carry it towards the $200 level by the end of the week. 

General Mills GIS – Amid declining stock prices, GIS shares are having a good day on Tuesday after outperforming during Monday’s session as well. At last check, the stock was up better than 1% to $88.69. The action in this stock appears to be due to a technical breakout above previous all-time highs dating back to December 2022. This is a strong name, which has surged nearly 23% over the last 52 weeks and is showing signs of continued accumulation. 

Proctor & Gamble PG – The consumer giant is benefitting modestly from a rotation into defensive names on Tuesday, with shares last trading up 0.30% to $156.83. This stock appears very technically sound right now and a push above all-time high levels – above $160.00 – could be in the cards for PG in the coming weeks. 

Philip Morris International PM – Not surprisingly, PM is seeing some buying pressure on Tuesday. At last check, the stock was up 1% to $99..32. This name has been largely range-bound for a decade, however, and would only become interesting from a trading perspective above all-time highs in the $120.00 area. Nevertheless, the stock does sport a very attractive dividend yield of over 5%. 

Kimberly Clark KMB – The consumer company reported strong Q1 earnings results prior to the opening bell, sending the stock up better than 2% to $145.47 as of this writing. Going all the way back to mid-2019, the $140.00 level in this stock has proved to be a strong technical resistance level. A move above $140.00 on April 21, coupled with strong earnings results, has set KMB up nicely for a potential run at all-time high levels just below $160.00 in the coming weeks. The stock has already jumped nearly 12% over the course of the previous month and is showing real technical strength. 

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