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Thursday's Energy Stocks: After another downgrade, PG&E Corp. slides again

U.S. equities capped the Thursday, Jan. 17, trading session on a positive note, following news that the Trump administration is considering rescinding tariffs on China as the countries work toward a trade deal ahead of a looming March 1 deadline.

The Dow Jones Industrial Average advanced 0.67% to close at 24,370.10, and the S&P 500 added 0.76% to finish the day at 2,635.96, with most of the gains coming in the final hours of the trading day.

In the energy sector, PG&E Corp. shrank back into negative territory, sliding 9.53% on more than 10x average trading volume to end at $6.36.

S&P Global Ratings downgraded the issuer credit rating of PG&E Corp. subsidiary Pacific Gas and Electric Co. to D from CC, after the utility missed a $21.6 million interest payment on $800 million of its 5.4% senior notes due 2040.

Meanwhile, activist hedge fund BlueMountain Capital Management LLC urged PG&E Corp. and its utility to shelve plans for Chapter 11 bankruptcy, saying the plan is "damaging, avoidable, and unnecessary" because the companies are solvent.

Fitch Ratings said that PG&E's bankruptcy will not have a negative credit impact on California's government, local governments and publicly owned utilities.

Among other California-headquartered investor-owned utilities, Edison International dropped 1.24% on about average volume to settle at $53.51, and Sempra Energy declined 0.27% in light trading to conclude at $112.36.

Dominion Energy Inc. closed down 0.04% on light volume to $68.94. The Virginia State Corporation Commission approved the cyber and physical security measures in utility subsidiary Dominion Energy Virginia's proposed grid transformation plan while rejecting most of the plan for being "unsupported by the evidence" or too costly for customers.

CenterPoint Energy Inc. edged up 0.07% on thin volume to $29.54, and Vectren Corp. added 0.14% in brisk trading to $72.29, after the Indiana Utility Regulatory Commission approved the pending $6 billion merger deal of the companies.

Also, Clearway Energy Inc. picked up 4.54% to $14.74 on roughly average volume, and El Paso Electric Co. added 2.81% to $50.50 in active trading.

The S&P 500 Utilities Sector saw a 0.42% increase to finish at 269.44.

In the oil and gas sector, Kinder Morgan Inc. shares rose 1.43% on heavy volume to $17.72, a trading day after posting its fourth-quarter 2018 earnings.

The company booked adjusted EBITDA of $1.96 billion, up from the $1.90 billion the company reported during the same period a year earlier. Kinder Morgan has earmarked $3.1 billion in spending on new projects in 2019 and expects $5 billion in distributable cash flow.

Shares of Exxon Mobil Corp. were up 0.68% in light trading to conclude at $72.13. One of its affiliates exercised an option to buy a 20% equity stake in the $2 billion Permian Highway pipeline project led by a Kinder Morgan subsidiary and Blackstone Energy Partners portfolio company EagleClaw Midstream Ventures LLC.

Investment bank Barclays initiated coverage of Apache Corp. with an "underweight" rating and a $29 price target, and Diamondback Energy Inc. with an "overweight" rating and a $189 price target.

Apache closed the day 1.54% higher on light volume to $31.69, and Diamondback inched up 0.01% in light trading to $105.65.

Among master limited partnerships, DCP Midstream LP retreated 1.43% to close at $32.42; Plains All American Pipeline LP shed 1.35% to end at $23.45; and Andeavor Logistics LP finished 1.30% down to $36.51, all on below-average volume.

The S&P 500 Energy Sector climbed 0.98% to 462.58, while the Alerian MLP Index dipped 0.05% to 247.45.

Market prices and index values are current as of the time of publication and are subject to change.