A Look at Leaders and Laggards in the Utilities Sector Last Week

Utilities continued their upward march last week and outperformed broader markets. The Utilities Select Sector SPDR ETF (XLU) rose 0.7%, while the S&P 500 fell more than 2% in the week ending March 8. The weak jobs report and indicators of a slowing global economy dented the market’s mood. The S&P 500 fell throughout the week. Utilities have risen 9% so far this year, marginally underperforming broader markets.

The benchmark ten-year Treasury yield trended lower and fell to 2.63% last week. Utility stocks and Treasury yields generally trade inversely.

Renewables titan NextEra Energy (NEE) rose 0.6%, while regulated utility giant Southern Company (SO) gained 1.8% last week. Both these utility stocks hit their new respective 52-week highs last week. The second largest utility by market cap, Duke Energy (DUK) stock rose 0.8%, and Dominion Energy (D) rose 1.3% during the week.

PG&E (PCG) continued its uptrend last week. It rose more than 8%. According to the Wall Street Journal, PG&E has requested the bankruptcy court a sanction to pay around $350 million as performance bonuses to employees in 2019. Interestingly, the utility had canceled $130 million of performance bonuses for 2018 late last month considering the sufferings of the wildfire victims.

Merchant power player NRG Energy (NRG) stock fell 1.8%, while AES Corporation (AES) stock rose more than 1% last week. AES, the top gainer among S&P 500 Utilities, recorded its 52-week high last week.