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Utilities Recap: The Big Gains and Losses Last Week

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The Utilities Select Sector SPDR ETF (XLU), which represents the top US utility stocks, marginally rose while the S&P 500 rose ~0.5% last week. The benchmark ten-year Treasury yield rose sharply to 2.76% after better-than-expected US GDP numbers came out last week. Utility stocks and Treasury yields generally trade inversely. So far this year, broader utilities have risen 8% while the S&P 500 has soared 12%.

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Gains and losses

Renewables titan NextEra Energy (NEE) stock fell 0.3% while regulated utility giant Duke Energy (DUK) fell 0.4% during the week. Southern Company (SO) stock dropped ~0.8%.

PG&E Corporation (PCG), a utility seeking bankruptcy protection, reported earnings last week. It posted an unadjusted loss of $13.24 per share in the fourth quarter against earnings of $0.22 per share in Q4 2017. For fiscal 2018, PG&E reported earnings of $4.0 per share against $3.68 per share in 2017.

PG&E recorded $10.5 billion in charges associated with liabilities for 2018 wildfires and $1.0 billion in charges relating to wildfires in 2017. PG&E said the cause of the “Camp Fire” is still under investigation, but it believes its equipment probably started the fire. PCG stock fell approximately 5% last week.

Dominion Energy (D) said in a statement last week that it’s considering an appeal to the US Supreme Court regarding the Atlantic Coast Pipeline’s permits over the next 90 days. Dominion is a 48% owner while Southern Company and Duke Energy are partners in the pipeline project.

NRG Energy (NRG) reported its fiscal 2018 earnings on February 28. The company reported EPS of $0.87 in 2018, which missed the consensus estimates.

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