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Utilities: Gains and Losses Last Week

Vincent Kruger
Utilities: Gains and Losses Last Week

Analyzing Utilities in the Week Ending January 4## A shaky start to 2019Utilities, the defensives, underperformed broader markets last week. The Utilities Select Sector SPDR ETF (XLU), the representative of the top utility stocks in the country, closed marginally down. The S&P 500 gained almost 2% in the week ending January 4. The broader markets were still volatile. The better-than-expected jobs report for December and Fed Chair Jerome Powell’s comments on being patient about raising rates helped the sentiment late last week.## Movers and shakersNextEra Energy (NEE) fell marginally, while Duke Energy (DUK), the second-biggest utility by market cap, fell 0.8% last week. Duke Energy declared a quarterly dividend of $0.9275 per share last week, which indicates a dividend yield of 4.4%. The ex-dividend date for the dividend is February 14. The dividend will be paid on March 18. Duke Energy has a long dividend payment history. Duke Energy has paid a cash dividend for 93 consecutive years.According to Reuters, wildfire-stricken PG&E (PCG) is considering filing for bankruptcy. The company is facing a multi-billion dollar liability associated with wildfires in 2017 and 2018. Bankruptcy isn’t certain yet. However, the company reported in November that its existing insurance wouldn’t be enough. The wildfire-related liabilities could have a material impact on the company’s financial condition. PG&E fell 30% in after-hours trading on January 4 following the news, according to Reuters.Top regulated utility stock Southern Company (SO) rose 1.7%, while Dominion Energy (D) fell 1.4% last week. Dominion Energy completed its much-awaited SCANA (SCG) acquisition last week.Continue to Next PartBrowse this series on Market Realist: * Part 2 - XLU: What to Expect from Utilities in 2019 * Part 3 - Utilities versus Broader Markets’ Total Returns * Part 4 - Comparing Utilities and Treasury Yields