XLU marginally fell

Trade war tensions continued to weigh on markets, and the S&P 500 plunged more than 2% last week. The defensives, utilities, fared better. The Utilities Select Sector SPDR ETF (XLU) fell 0.6% for the week ended May 10. Utility stocks and Treasury yields generally trade inversely to each other. The benchmark ten-year Treasury yields closed at 2.42% last week.

How Utilities Fared amid Broader Market Swings Last Week

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So far this year, utility stocks have gained ~11%, while the S&P 500 has gained more than 15%.

Leaders and laggards

The second biggest utility by market cap, Duke Energy (DUK), reported its first-quarter earnings last week. It reported adjusted earnings of $1.24 per share for the quarter ending March 31. In the same quarter last year, it reported earnings of $1.28 per share. Milder weather and share dilution negatively affected Duke Energy’s EPS in Q1 2019. Duke Energy stock fell more than 2% last week.

Almost all the top utility stocks trended lower last week. As an exception, Southern Company (SO), the top regulated utility stock, gained marginally.

Bankrupt utility PG&E (PCG) was the biggest loser among utilities during the week. It tumbled ~13.5%. Merchant power stock NRG Energy (NRG) stock has also been notably weak since its quarter earnings early this month. It fell 5.4% last week.

Competitive utility AES (AES) also reported Q1 2019 earnings last week. It posted adjusted EPS of $0.28 per share, missing consensus estimates, implying flattish growth YoY. AES stock lost 4% last week.

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