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June 20, 2019, 10:18 a.m. EDT

Utilities stocks inch lower as AES rally balanced by Treasury yield's drop

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By Tomi Kilgore

The utilities sector eased slightly Thursday, to buck a broader stock market rally, as a sharp drop in longer-term Treasury yields was balanced with a rally in AES Corp.'s stock /zigman2/quotes/209256253/composite AES -0.48% after an analyst upgrade. The Dow Jones Utility Average /zigman2/quotes/210598062/realtime DJU +0.12% inched less than 0.1% lower, although 8 of 15 components traded up, while the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.10% jumped 222 points, or 0.8%. AES shares jumped 1.8% after Bank of America Merrill Lynch analyst Julien Dumoulin-Smith raised his rating to neutral from underperform, and raised his price target to $16.50 from $16. "We perceive upside to renewable development opportunities and expect [liquid natural gas]/logistics opportunities in Vietnam and the Atlantic Basin to drive future growth," Dumoulin-Smith wrote in a note to clients. Among other more-active utility stocks, Southern Co. /zigman2/quotes/208000495/composite SO +0.11% edged up 0.1%, Exelon Corp. /zigman2/quotes/205982254/composite EXC +0.72% was little changed and Dominion Energy Inc. /zigman2/quotes/206853976/composite D -0.18% gained 0.1%. The yield on the 10-year Treasury note fell 3.1 basis points to 1.998%, the first move below the 2% mark since November 2016, amid increasing speculation that the Federal Reserve will cut interest rates. Utilities stocks usually rise when Treasury yields fall, and Treasury prices gain, as the sector's relative high yield makes then more attractive. The Dow utilities implied dividend yield is 2.94%, compared with the implied yield for the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.10% of 2.03%.

/zigman2/quotes/209256253/composite
US : U.S.: NYSE
$ 18.81
-0.09 -0.48%
Volume: 5.93M
Dec. 5, 2019 6:30p
P/E Ratio
24.74
Dividend Yield
2.90%
Market Cap
$12.49 billion
Rev. per Employee
N/A
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/zigman2/quotes/210598062/realtime
US : Dow Jones Indices
856.86
+1.06 +0.12%
Volume: 41.74M
Dec. 5, 2019 5:16p
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
27,677.79
+28.01 +0.10%
Volume: 219.99M
Dec. 5, 2019 5:16p
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/zigman2/quotes/208000495/composite
US : U.S.: NYSE
$ 62.76
+0.07 +0.11%
Volume: 3.22M
Dec. 5, 2019 6:30p
P/E Ratio
14.43
Dividend Yield
3.95%
Market Cap
$65.82 billion
Rev. per Employee
$808,954
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/zigman2/quotes/205982254/composite
US : U.S.: Nasdaq
$ 44.86
+0.32 +0.72%
Volume: 5.84M
Dec. 5, 2019 4:15p
P/E Ratio
18.86
Dividend Yield
3.23%
Market Cap
$43.61 billion
Rev. per Employee
$1.08M
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/zigman2/quotes/206853976/composite
US : U.S.: NYSE
$ 81.19
-0.14 -0.18%
Volume: 3.61M
Dec. 5, 2019 6:30p
P/E Ratio
61.05
Dividend Yield
4.52%
Market Cap
$66.83 billion
Rev. per Employee
$631,737
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
27,677.79
+28.01 +0.10%
Volume: 219.99M
Dec. 5, 2019 5:16p
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