New communication sector’s shine could soon wear off


By April Joyner

NEW YORK (Reuters) – The mash-up of old and new media may not be a winning combination for the new S&P communication services sector index (SPLRCL) as its highest fliers face regulatory threats and challenges to user growth.

The reconstituted sector, which debuted at the end of September, includes telecom, internet, media and entertainment companies such as AT&T Inc (N:T), Walt DisneyCo (N:DIS) and Twitter Inc (N:TWTR).

Three of the five momentum stocks collectively known as FAANGs – Facebook Inc(O:FB), Netflix Inc (O:NFLX) and Google parent company Alphabet Inc (O:GOOGL) – make up roughly half of the new sector by market capitalization.

Facebook and Alphabet moved to communication services from the technology sector (SPLRCT). Netflix was previously in the consumer discretionary sector (SPLRCD). The other FAANG stocks, Inc (O:AMZN) and Apple Inc (O:AAPL), remain in the consumer discretionary and technology sectors, respectively.

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