The largest exchange-traded fund tracking leisure stocks is having no fun Monday as a combination of tariff pressure on Harley-Davidson Inc. and lousy forecasts from Carnival Corp. are pushing investors to sell.
The Consumer Discretionary Select Sector SPDR Fund, known by its ticker XLY, absorbed $1.3 billion of trades, more than 2.5 times its daily average over for the past year. Three massive block sales — each worth at least $53 million — hit before 11:50 a.m. in New York, according to Bloomberg data.
At its low, XLY was down 2.7 percent, the most intraday since April 6, as a string of consumer companies made headlines. Harley-Davidson plunged 7 percent after the motorcycle maker said it would shift some production out of the U.S. in response to retaliatory European Union tariffs. Cruise lines also sank, with Carnival dropping more than 10 percent at its lowest after cutting its adjusted earnings-per-share forecast for the year.
“This is a perfect Storm in XLY, between tariff headlines from Harley-Davidson, Carnival’s warning weighing on fellow cruise liners like Norwegian and Royal Caribbean,” said Dave Lutz, head of ETFs at JonesTrading Institutional Services.
Investors also are unwinding their momentum trades, which is weighing on crowded tech names and pulling down shares of the likes of Amazon.come Inc. and Netflix Inc., Lutz said. Amazon is XLY’s largest holding, making up more than 22 percent of the fund’s exposure. The shares sank 3.1 percent.
— With assistance by Janet Freund