What is the Difference Between a Sector and an Industry?

Understanding Wall Street Lingo

To keep things easily organized, Wall Street likes to divide businesses into different categories. That way, they can see the exposure various portfolios have to different parts of the economy. The top level consists of sectors – things such as basic materials, conglomerates, consumer goods, financial, healthcare, industrial goods, services, technology, and utilities.

Industries, on the other hands, are sub-divisions of sectors. Under the Consumer Goods sector, for instance, there are industries such as Appliances, Beverages, Cigarettes, Cleaning Products, Confectioners, Farm Products, Office Supplies, and Sporting Goods. Under the Financial Sector fall industries such as Asset Management, Insurance Brokers, Industrial REITs, and Savings & Loans. Under the Utilities sector, you have industries such as Electric Utilities, Gas Utilities, and Water Utilities.