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Defensive Stocks in a Bear Market

Tuesday, 23 Sep 2008 | 9:03 AM ET

As uncertainty in the markets intensifies, with the Dow falling 812.33 points in the last three days to its lowest level since November 2005, and the S&P 500 tumbling 95.29 to May 2005 levels, investors are increasingly seeking "safe havens" to weather the current crisis.

Gold futures for December delivery jumped 11% yesterday (see Gold's top 10 biggest moves), its biggest percentage increase ever, while December Silver contracts jumped 15%, as investors flocked to these precious metals in an effort to preserve capital from the markets' turbulence.

Counter-cyclical stocks, companies that produce goods and services that are somewhat immune to an economic slowdown, have also proven resilient to the markets' volatility. Consumer Staples companies such as Procter & Gamble , Kraft Foods , and General Mills , are up nearly 15% quarter-to-date, while all the major U.S. stock indices have fallen over 6.5% during the same period.

The S&P 500 alone is down 9.66% quarter-to-date, and within the index, only three sectors are up during the third quarter. Leading the way is the Consumer Staples sector, which has increased by 4.86%, followed by the Consumer Discretionary sector with a 1.61% increase, and lastly, the Health Care sector with a 0.10% jump.

While diversification should be the foundation of every portfolio, many investors are turning their focus towards capital preservation. The following list includes some of the companies in the S&P 500 Consumer Staples sector with an increase of up to 22% quarter-to-date.

  Price   Change %Change
GILD
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MDLZ
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PG
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SYY
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MKC
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CPB
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AVP
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PBG
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DF
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CLX
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HSY
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PS U 710Y TR
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