What Are Stock Market Sectors?

The S&P stock market sectors categorize publicly traded companies in24 industry groups and 11 industries. S&P (Standard & Poor’s) and MSCI (Morgan Stanley Capital International) is the Global Industry Classification Standard authorized and followed to sort companies into sectors according to their business offerings.

Types Of 11 Stock Market Sectors

Investors utilize this information to invest in the sector of their interest. Some investors who are looking to diversify their portfolios also find this sector information valuable.

The sectors are divided as follows.

Health Care

This sector comprises pharmaceutical companies, medical supply businesses, or businesses that improve the human body and mind.

Companies that carry scientific operations or manufacture medical implant devices are all part of the health care sector.  Cannabis is recent but can be included as a part of this sector.

Consumer Discretionary

This category involves luxury items or services that fall under the wants, not needs, of consumers. The demand depends on several external factors such as price, features, economic conditions, etc.

Products that are all under discretionary consumer goods are cars, jewelry, electronic goods, etc.

Information Technology

IT sector has companies that manufacture and distribute technological products and provides internet services. This sector has developed throughout the years because of the rapid change in technological trends.

Companies that fall under this sector provide computers, operation systems, and microprocessors.

Financials

The financial sector constitutes all companies concerned with finance, money, investments, and any money movement. This includes credit card issuers, insurance companies, banks, credit unions, real estate investment trusts, and so on.

Communication Service

This sector has companies that are engaged in keeping people connected. This can be via phones or through the internet. Hence, the communication service sector comprises companies that involve entertainment, media, and internet service providers.

Energy

All companies that are a part of oil, fuel, and gas businesses fall under the energy sector. These companies may find, extract, or drill places in search of these products. Refinery companies that manufacture tools and equipment used for the refinement process are all included in this sector.

Industrial

This comprises an extensive range of companies: railroad, airlines, and military weapons. All these Aerospace, defense and construction, and engineering companies are part of the industrial sector.

Materials

Companies that provide raw materials to other sectors for smooth functioning come under the material sector. This involves mining companies or forestry companies that extract raw materials and distribute them to other sectors.

Consumer Staples

This sector consists of all products that build up the necessities of a person’s life. The consumer staples sector includes food and beverage companies and personal and household products required for everyday usage.

Utilities

Utility companies are those that generate or provide water, gas, and electricity for households. Many companies are moving towards renewable energy sources. They will also be included in the utility sector.

Real Estate

The name of this sector defines the types of companies that belong in this sector. Real estate consists of real estate investment trusts, realtors, and other companies involved in real estate. The real estate sector constitutes 2.9% of the S&P 500.