Dan Caplinger has been a contract writer because that the Motley couchsurfingcook.com due to the fact that 2006. Together the couchsurfingcook.com"s director of investment Planning, Dan oversees lot of the personal-finance and investment-planning contents published daily on couchsurfingcook.com. Through a background as an estate-planning attorney and independent gaue won consultant, Dan"s posts are based on much more than 20 years of suffer from all angles of the financial world.Follow

The S&P 500 (SNPINDEX:^GSPC) did quite well in 2016, finishing the year through a full return of around 12%. The was far better than 2015"s flat performance, and brand-new records made countless index investors rather happy through the year"s results. However the height stocks in the S&P 500 did far better than the all at once benchmark"s return. Let"s take it a look at the list of the ideal stocks in the S&P and also then attract some conclusions from their performance.

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Stock

2016 Return

NVIDIA (NASDAQ:NVDA)

227%

ONEOK

149.6%

Freeport-McMoRan (NYSE:FCX)

94.8%

Newmont Mining

90.1%

Spectra Energy

80.1%

Applied products (NASDAQ:AMAT)

75.7%

Quanta Services

72.1%

Comerica (NYSE:CMA)

66%

Martin Marietta Materials

63.7%

Halliburton

61.7%


Source: S&P an international Market Intelligence.

The power sector is back!

The many obvious source of solid performance among S&P 500 stocks was the large bounce in oil and also natural gas prices during 2016. After start 2016 at listed below $40 per barrel and quickly falling below $30 at an early stage in the year, crude oil prices climbed above $50 every barrel to finish the year. Natural gas did even better, finishing 2016 with a nearly 60% increase from wherein they ended in 2015.

Companies across the sector felt the impact of those gains. Because that producers choose Freeport-McMoRan, greater prices meant better prospects for bringing future projects on line too as far better profits because that existing drilling. For solutions companies favor Halliburton and also infrastructure specialists like ONEOK and also Spectra Energy, better production meant greater needs for your goods and also services, and also that assisted drive share-price gains for those stocks as well.

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Image source: Getty Images.

Moreover, companies external the industry that concentrated strongly ~ above serving power companies likewise benefits. Comerica is a good example, due to the fact that the Dallas-based regional bank had a higher than typical concentration of loan to energy companies in that loan portfolio. That added to subpar power in 2015 throughout crude"s plunge, yet Comerica"s share price tracked the price of crude quite carefully as it rebounded. Moreover, more favorable conditions for financial institutions generally also contributed come its strong performance.


Indeed, power was simply the most visible of products that rebounded. Freeport"s and Newmont"s gains additionally reflected solid performance for copper and also gold, and also the illustration of martin Marietta products on the list mirrors that even demand for basic materials like building aggregates was generally much better in 2016 than in current years.

Given exactly how far energy prices fell, there"s every factor to believe that the commodity could proceed to climb in 2017. The question, though, is how much stellar gains in plenty of energy share have currently taken future oil-price increases for granted. One thing is clear: if oil doesn"t manage to host onto its recent gains and also starts falling again, climate the benefit on these and other energy stocks will certainly prove short-lived.

Playing the chip surge

Outside energy, an innovation stocks were the other large performers in 2016, but the top stocks focused on a single sector: semiconductor chips. NVIDIA"s top returns come on the basis of the increasing popularity the its graphic chips, which lead the industry and have uncovered uses in an increasingly wide range of applications. By keeping competitors at bay and looking to capitalize in locations like self-driving cars and also artificial intelligence, NVIDIA collection itself except the group in 2016 and could continue to perform so.

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Image source: NVIDIA.

Yet success make its way throughout the chip sector. Used Materials was a an excellent example, posting gains as the cycle because that the industry turned upward beforehand in the year and helped the company generate much better results. A focus on 3D storage chips and much more efficient manufacturing processes helped used Materials outpace the rivals, and also with strong demand for screen panels and solid-state journey storage solutions, more gains room possible.


The S&P 500 provided investors solid return in 2016, and also the major trends the drove stocks higher showed increase quite plainly in the finest performing share in the index last year. Even though tensions amongst some industry participants room rising about the stock market"s future in 2017, investors will keep looking at these 10 S&P 500 share to see if they have the right to duplicate also a part of their strong performance end the past year.

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This short article represents the opinion the the writer, who may disagree through the “official” recommendation position of a Motley couchsurfingcook.com premium advisory service. We’re motley! Questioning one investing thesis -- also one the our very own -- helps us all think critically about investing and make decision that help us end up being smarter, happier, and also richer.
Dan Caplinger has actually no place in any stocks mentioned. The Motley couchsurfingcook.com owns shares of and recommends Nvidia, ONEOK, and Spectra Energy. The Motley couchsurfingcook.com own shares that Freeport-McMoRan Copper and Gold and also Halliburton. The Motley couchsurfingcook.com has actually a disclosure policy.