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Chart of the Day for June 17, 2013: $SOX
The Philadelphia Semiconductor Index (SOX) tracks 30 semiconductor stocks including such well-known names as Intel (INTC) and Texas Instruments (TXN). As the economy improves, so do the manufacturing efficiencies of many of the companies in this space. As a result, this index tends to perform extremely well during periods of economic improvement, generally helping to lead the overall market on a relative basis. The featured chart shows how improvement in this index is positively correlated with a strong S&P 500 index. Because many of the companies within this index cannot sustain their bottom line growth over long periods, the index tends to quickly move through boom and bust periods. The chart below illustrates this general concept over the past decade.
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