Today’s twists and turns on Wall Street came about as traders reacted to yet another day of negative headlines surrounding Europe’s sovereign-debt crisis and fled to the safest sectors out there.
Traders faced front and center as continued turmoil in Italy weighed on major stock indexes as details of France’s new austerity program became clear.
Italian Prime Minister Silvio Berlusconi’s struggle with a key budget vote on Tuesday could result in confirmation that he no longer commands a majority in the Roman parliament.
Traders expressed their concern by biding Italian 10-year bond yields to 7.23% — well above the 7% level the markets have been considering unsustainable.
Given the continued turmoil, traders are moving funds into safe havens like gold and the U.S. dollar.
Scans this afternoon also showed money flowing into the healthcare sector — possibly for its known stable dividend yield as one of the most recession-resistant areas of the economy.
If this trend continues — or the next time the euro zone shudders — traders can either trade individual companies or trade the broad sector ETF, the Health Care Select Sector SPDR (XLV, quote) with a 2.07% yield.
This ETF seeks to replicate the Health Care Select Sector index. The fund generally 100% invested, but at least 95%, of its assets in the securities comprising the index: pharmaceuticals, health care equipment & supplies, health care providers & services, biotechnology, life sciences tools & services and health care technology.
Abbott Laboratories (ABT, quote) with its 3.60% yield has a global presence in four segments: pharmaceutical products, diagnostic products, nutritional products and vascular products. Abbott has also been on the hunt for growth through acquisitions, both in the developed world and in emerging markets.
Amgen Inc (AMGN, quote) with its 2.03% yield, is an independent biotechnology medicine company. Amgen discovers, develops, manufactures and markets medicines for grievous illnesses. The company recently beat earnings expectations and jumped 4.98% in today’s action.
Traders looking to start a position in Amgen should look for a pullback, possibly taking advantage of the upcoming dividend payout this month to find an opening.