Updated: Utility stocks take big hit in market plunge Monday, rebound slightly Tuesday morning
- UPDATE 10:30 a.m.: The Dow Jones Utility Index has rebounded slightly from yesterday's losses. At 10:30 this morning, the index of 15 major utilities was up 0.76%, while the Dow as a whole was up 1.63%.
- Original Story: Stocks on Wall St. took a wild ride on Monday, with the Dow Jones Industrial Average plunging nearly 1,100 points in the first minutes of trading in the morning, only to rebound to near parity in the early afternoon, and then ultimately dropping again to end the day at 15,871. That's a final loss of more than 580 points, or about 3.5%. The major U.S. indexes all fell between 3.5% and 4%.
- Stocks in the utility sector largely mirrored the broader market trends throughout the day, but ended up taking a slightly bigger hit than the rest. The Dow Jones Utility Average, based on a group of 15 leading electric utilities, closed at 573 points, a loss of over 24 points or about 4%.
- It wasn't all doom and gloom for energy stocks, however. SolarCity, the leading U.S. residential solar installer, closed up 7.1% on the day at $43.91 as its principal, Elon Musk, bought over 123,000 shares. AGL Resources, which this morning announced it was being acquired by Southern Co., closed up 28% at $61.41.
Usually considered a safe harbor in times of market turmoil, electric utility stocks took a beating along with the rest of the market on Monday, with the Dow Jones Utility Average closing down more than 4%.
Of the 15 stocks included in the average, Duke Energy took the biggest hit, closing down more than 5.5% at about $72. Exelon performed the best, closing down less than 1.1% at $32.64.
Exelon's performance, the Wall Street Journal pointed out, could partially be attributed to the results of a recent capacity auction in the PJM interconnection, released Friday. While three of Exelon's nuclear plants did not clear the auction, casting further doubt on their survival, investors seemed more focused on the fact that capacity payments for all plants in PJM are set to jump 37% or more, meaning millions of dollars more per year for generators that can meet new performance requirements.
Other companies with heavy generation footprints in the PJM region also weathered the sell-off better than the sector overall. NRG Energy was down 1.84% on the day and Dynegy down 2.41%. For generators, the auction was the "first piece of good news in a long time" in PJM, an analyst told Bloomberg.
But while the picture didn't look too bright for many utilities, it was even worse for the oil and gas sector. The Dow's oil and gas index closed down more than 5%, driven by weak oil prices in conjunction with the larger sell-off. One big exception, though, was gas distributor AGL Resources, which closed up 28% after utility giant Southern Co. announced it would purchase the Atlanta-based company this morning. Investors were not so kind to Southern, however, which was down 4.85%.
The other bright spot for energy was the renewables sector. The Dow Jones U.S. Alternative Energy Total Stock Market Index, which includes companies involved in renewable energy equipment and non-fossil fuels like ethanol, dropped less than half of a percent.
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