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XLU: Why Did Utility Stocks Fall on June 26?

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XLU fell ~2%

Utility stocks fell, while the benchmark Treasury yields rose on June 26. The Utilities Select Sector SPDR ETF (XLU), the representative of top utility stocks in the country, fell 2.2%. The S&P 500, the broad market index, fell marginally on June 26.

XLU 1

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Utility stocks fell

NextEra Energy (NEE) and Dominion Energy (D) fell 1.5% and 3%, respectively. Southern Company (SO) and Duke Energy (DUK) fell 1.8% and 2.4% on June 26. The benchmark ten-year Treasury yield closed at 2.06%. The benchmark ten-year Treasury yield was weak and fell below 2% levels this week. Utility stocks and Treasury yields usually trade inversely to each other.

PG&E (PCG) was one of the exceptions to the fall on June 26. PG&E stock rose 0.6%. The stock has risen more than 20% in the second quarter. Reuters reported that PG&E’s bondholder committee proposed a bankruptcy reorganization plan to inject $30 billion to emerge from Chapter 11 bankruptcy. To learn more, read PG&E Stock Started Lower and Fell ~6% on June 24.

NRG Energy (NRG) was the biggest loss on June 26. The stock fell more than 4%. NRG Energy stock has been on a steep downtrend. The stock has fallen more than 15% in 2019. With the fall on June 26, NRG Energy has entered the “oversold” zone with its relative strength index at 28.

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