This week's market sector focuses on Consumer Staples. Just what exactly are consumer staples, you ask? This is sometimes referred to as the 'survival' sector in that, no matter what the economy is doing, these basic necessities will still be bought. Typically, industries that manufacture and sell food/beverages, tobacco, prescription drugs, and household products fall into this category. A prime example of a consumer staple stock would be Proctor & Gamble because many of its products are household and food related.

As a rule Consumer Staples do well in bear markets. These stocks tend to pay steady dividends. Consumer staples are thought of as "defensive plays" when negative market sentiment prevails and economic recovery is slow going. Over the last few years, the entire sector has done quite well while the economy has slumped. Today, with the economists calling for better market conditions, the upside potential in this sector must be viewed as limited at best.

Nonetheless, lets look at three Consumer Staples that help make up the Dow Jones Industrial Average:

Coca-Cola Co. (NYSE-KO) is one of the world most recognisable brands. Everyone knows Coke. And just about everyone drinks Coke (or one of its many other products, like Dasani water or Minute Maid). Third Quarter earnings were released by the #1 soft-drink maker on Thursday and profits grew a healthy 12 percent when compared with the same quarter last year. The beverage giant posted net income of $1.22 billion or 50 cents a share compared with $1.09 billion, or 44 cents, in the year earlier period. Revenues in the third quarter rose 6.4 percent to $5.66 billion from $5.32 billion a year earlier led by positive currency trends and increase in gallon shipments.

Making use of its available cash, Coca-Cola plans to buy back about $1.5 billion of its stock this year. Analysts recently upgraded the stock from 'neutral' to 'overweight' in light of the strong financials reported this quarter.

Wal-Mart Stores Inc. (NYSE-WMT) is fast becoming an American icon, much like McDonalds or Starbucks. Chances are if you want something, Wal-Mart has it, and for less. Despite criticism for its exploitative employment practices and uncanny ability to wipe out nearby 'mom and pop' merchants, Wal-Mart continues to blossom.

Sales and profits for the company have been robust. To give an idea of their sheer volume, Wal-Mart reported net sales for the five-week period ending October 3, 2003, of $23.390 billion, or an increase of 13 percent over the same period on the prior year. Due to release third quarter earnings of .466 cents per share on the 13th of November, Wal-Mart looks in line to meet (or beat) those analyst expectations, as back to school and early holiday shopping gets under way.

Proctor & Gamble Inc. (NYSE-PG) recognised by Forbes magazine as one of the top ten most admired companies, household products conglomerate Proctor & Gamble manufactures and markets more than 250 products to consumers around the globe.

Broken down by category the company comprises of baby and family care, fabric and home, beauty care, health care and food and beverage. For the fiscal year ending June 30, 2003, P&G revenues increased by 8 percent to $43.38 billion. Net Income increased 20 percent to $5.06 billion. These results reflected growth in the health and beauty care lines and overall improved gross margins. Earnings are due out the week of October 28th with Analysts estimates & P&G guidance expected to be in the $1.25 per share range.

Good health & good investing.

Gavin Davis is a financial advisor at LOM Holdings Ltd. He can be reached at 294-7006 or on email at gavin.davis@lom.bm