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US Utilities Fall 4% after Trump’s Victory and NRG Surges 5%

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Nov. 10 2016, Updated 10:26 a.m. ET

US presidential election

After all the mud-slinging campaigns, US citizens elected Donald Trump over Hillary Clinton in the 2016 presidential election. Trump’s election resulted in global markets bleeding initially only to recover later.

Utilities, one of the most talked-about sectors this year, plunged severely on Trump’s victory on November 9, 2016. The Utilities Select Sector SPDR (XLU) corrected 3.7%, while the S&P 500 (SPY) was up 1% to close the day.

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Utilities plunge while NRG shoots up

On November 9, 2016, renewable giant NextEra Energy (NEE) was a major loser. It fell more than 6%, while Exelon (EXC) and Xcel Energy (XEL) corrected more than 4.5% each. Southern Company (SO) and Duke Energy (DUK) fell 3% each.

The largest independent power producer NRG Energy (NRG) rose 5% on November 9, 2016. NRG Energy’s large coal-led generation might have triggered the surge. In the last five trading sessions, NRG has risen more than 20%.

Coal companies’ shares surged, while solar companies tanked. Donald Trump’s election campaign emphasized rolling back the Clean Power Plan and other climate-friendly EPA regulations. The Clean Power Plan aimed for a 32% reduction in greenhouse gas emissions by 2030 compared to the 2005 level. It focuses on natural gas and renewables and the reduction of coal-based power generation. Prospects that the plan could be rolled back sent renewable giants like NEE tumbling.

Many US utilities have been actively investing in renewable energy sources and low-emitting power generation capacities in the last few years. The uncertain future of the Clean Power Plan now raises questions over the billions of dollars the companies have spent.

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