Stock Sector Definition

A Sector is a portion of the economy that either produces similar goods & services, or performs with similar operating characteristics as its peers.

Sectors help investors clear out some of the noise of the market to focus on stocks that are more similar, making it easier to form an apples-to-apples comparison between securities.

Some investors look to see how a stock performs vs. its sector in order to add more clarity as to why it performs the way it does, and use that to influence their decision making.