Signs of life in the Utilites Sector? (XLU)

The biggest sector move today is the Utilities Sector, up 1.1% today. The Utilities SPDR (ETF) (NYSE:XLU), which seeks to provide investment results that correspond to the price and yield performance of the Utilities Select Sector of the S&P 500 Index, is up +.41 or 1.34%.

Looking at the YTD view of the Utilities sector against the S&P500, notice that the S&P is up 27% YTD, while the Utilities sector is down -25% YTD.

It's our job as investors to find sectors that are underperforming, and get in before everyone else does.

Mark Gongloff at the WSJ has this to share about the Utilities Sector: History would suggest it is too soon to buy utilities. They typically underperform the market for up to 12 months after recessions end, as growth stocks gain favor, according to Ned Davis Research analyst John LaForge.

By that theory, utility shares bought today might trail the market until June 2010, assuming the recession ended in June 2009.

But the stock market has snapped back much more quickly than has been usual this time, Mr. LaForge notes, raising the possibility that the square dance of relative sector performance might move more quickly, too. If that is so, then utilities should break higher sooner.

Stockmasters, if you want exposure to the Utilities sector, your best bet is to go with the Utilities SPDR (ETF) (NYSE:XLU). The ETF also pays a healthy 4.4% dividend.