Utilities stocks follow broader market
After rising marginally during the previous week, the Utilities Select Sector SPDR ETF (XLU) dropped 1.3% during the week ending April 17. The drop came in spite of the drop in Treasury yields across maturities. Utility stocks, especially the highly leveraged ones, are very sensitive to interest rates.
While the drop in Treasury yields signaled diminished interest rate worries, the broader market dropped. The SPDR S&P 500 ETF Trust (SPY) represents the broader market—it dropped 1%. SPY is a key ETF that tracks the S&P 500 benchmark index. The iShares Core S&P 500 (IVV) also tracks the S&P 500.
Dynegy (DYN) was the biggest gainer among the power utilities for the week ending April 17. The stock gained 3.2% to end the week at $32.32 with a market capitalization of $4.1 billion. Most of the gains came in on Wednesday, April 15, on the news that the electricity auctions in Illinois saw the prices scaling up higher. Dynegy has a large generating asset base in Illinois. Many analysts, including those in Barclays and Goldman Sachs (GS), recently gave a “buy” rating on Dynegy.
OGE Energy (OGE) gained 1.9% to end the week at $32.67 with a market capitalization of $6.5 billion.
NRG Energy (NRG) gained 1.6% to end the week at $24.96 with a market capitalization of $8.4 billion.
Centerpoint Energy (CNP) gained 0.7% to end the week at $20.90 with a market capitalization of $9 billion.