Utilities is by far the biggest loser of the 11 S&P 500’s sectors on Wednesday, as the high-yielding sector is weighed down by the 10-year Treasury yield’s rise toward a 16-month high. The SPDR Utilities Select Sector ETF slumped 1%, and has now lost 5.4% since the election. The concern is that President-elect Donald Trump’s pledge to boost infrastructure spending will lift Treasury yields by increasing economic growth and inflation and by increasing the budget deficit. The more Treasury yields rise, the less attractive high-yielding stocks like utilities are to investors. The 10-year yield has spiked up 0.5 percentage points since the election. The SPDR Utilities ETF (XLU) has an effective dividend yield of 3.5%, compared with the S&P 500’s aggregate dividend yield of 2.1%, according to FactSet. The XLU has now lost 12% since the July 6 record close of $52.98. It was still up 7.3% year to date, while the S&P 500 has gained 7.8%.
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