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Utilities: Analyzing Gains and Losses Last Week

Vincent Kruger
Utilities: Analyzing Gains and Losses Last Week

Utilities: Analyzing Gains and Losses Last Week## Will the defensives repeat 2018?Utilities continued to underperform broader markets last week. The Utilities Select Sector SPDR ETF (XLU) rose almost 1%, while the S&P 500 rose 2.5% in the week ending January 11. Utilities beat the S&P 500 by a wide margin in 2018 particularly when markets started falling in the fourth quarter.The benchmark ten-year Treasury yield was largely flat last week—it closed at 2.70%. Utility stocks and Treasury yields usually trade inversely to each other. Higher interest rates could make utilities less appealing compared to bonds. The Fed delivered four quarter-point rate hikes last year—the most hikes since it started rate normalization in 2015.## Movers and shakersNextEra Energy (NEE), the biggest utility by market cap, stock rose ~2%, while Duke Energy (DUK) fell almost 1% last week. Regulated utility giant Southern Company (SO) grew more than 4%, while Dominion Energy (D) fell more than 3%.PG&E (PCG) stock fell 30% last week due to bankruptcy concerns. On January 13, PG&E reported that CEO Geisha Williams resigned. We’ll discuss PG&E more in the next part of this series.Merchant power stock NRG Energy (NRG) rose more than 3% last week. NRG Energy was the top-rallied stock in 2018 among utilities. The stock rose almost 37% in 2018. Read Will NRG Energy Stock Continue to Increase in 2019? to learn more.Competitive utility Exelon (EXC) rose 2.6%, while FirstEnergy (FE) rose 3.2% last week. So far in 2019, utilities at large have risen ~0.6%, while S&P 500 has risen almost 4%.Continue to Next PartBrowse this series on Market Realist: * Part 2 - Bankruptcy Fears Take Charge: PG&E Stock Fell 30% Last Week * Part 3 - XLU: What to Expect from Utility Stocks * Part 4 - Dividend Yields: Analyzing Top Utility Stocks