The Fed's decision Wednesday to increase interest rates for the first time since June 2006 sparked a rally in an unlikely group of stocks: dividend payers.
After the announcement, stocks treasured for their sizable payouts — like utilities, consumer staples and telecom — posted gains greater than 1 percent and ended the day as the S&P 500's biggest winners. In the past, Fed rate hikes took down most of these groups.
Shares of dividend payers, tracked through the iShares Select Dividend ETF, are down 4 percent for 2016 in anticipation of this very Fed moment. But now that the rate hike is done, how can it be that these stocks are leading the market higher?