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How US Utility Stocks Performed Last Week

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Utility stocks climbed higher

While Hurricane Harvey and Hurricane Irma left millions of Americans out of power, US utility stocks continued to climb higher last week. The Utilities Select Sector SPDR ETF (XLU) rose more than 1.0%, while the broader markets fell half a percent.

Many investors have chosen to remain invested in the safer utilities sector this year, given the market turmoil. That has led to utilities (generally considered a slow-moving sector) outperforming the broader markets by a fair margin.

XLU % change

The SPDR S&P 500 (SPX-INDEX) (SPY) has risen nearly 10.0%, while US utility stocks at large have risen more than 14.0% so far this year.

The ten-year Treasury yield trended downward and fell from 2.2% to 2.0% during the week. The weakness in Treasury yields is generally considered positive for defensives such as utilities.

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Leaders and laggards

The second-largest regulated utility, Southern Company (SO), was the highest gainer during the week, rising 4.0%. The Georgia-based utility has recently decided to go ahead with the construction of its struggling Vogtle nuclear power plant. The power plant issues have largely pulled down its stock in the last few months. Management, seeing value in continuing the Vogtle construction, may have triggered investor optimism, which could have driven the gain.

The largest utility by market capitalization, NextEra Energy (NEE), fell 1.3% during the week, while Duke Energy (DUK) rose 0.80%.

One of the largest regulated utilities, PPL Corporation (PPL), rose 1.1% during the week. It went ex-dividend on September 7, 2017. You can read about its dividend profile in PPL Has a Premium Yield, Dull Dividend Growth.

NRG Energy (NRG), the rather risky section of the S&P 500 Utilities Index, fell more than 3.5% last week, while FirstEnergy (FE) fell 0.70%.

Let’s see where utilities might go this week from their current levels.

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