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Tuesday's Energy Stocks: McDermott, CB&I stocks plunge after merger announcement

Benchmarks stock indexes gave up profits Tuesday, Dec. 19. Energy markets did not fare well either, with many indexes ending in the red.

The Dow Jones Industrial Average lost 0.15% to close the day at 24,754.75, and the S&P 500 retreated 0.32% to finish at 2,681.47. The SNL Energy Index shed 1.40% to 286.15 at market close.

Chicago Bridge & Iron Co. NV and McDermott International Inc. both saw share prices dive as the news of their $6 billion all-stock merger broke. Both companies plan to increase synergies by combining McDermott's presence in the Middle East and CB&I's operations in the U.S. McDermott's shares declined 11.86% to $6.69 on nearly 12 times average volume, and CB&I shares dropped 10.66% to $16.01 at close of business on more than six times the normal volume.

PPL Corp. shares slipped 4.56% to close at $32.42 on heavy volume. The company received a ratings downgrade to "Underperform" from "Neutral" from Macquarie Capital (USA) Inc. The rating agency cited the expectation of a reduction in allowed returns and leverage at PPL's U.K. subsidiaries in the next regulatory review, which will put pressure on the company's dividend.

Inter Pipeline Ltd. stock decreased 3.38% to close at C$25.70 on high volume after the company's board decided on building a C$3.5 billion petrochemical plant in Alberta, its largest capital investment so far.

The SNL Midstream Energy Index decreased 0.92% to close at 107.41.

In gas utilities, Northwest Natural Gas Co. lost 3.12% to finish the day at $60.55, New Jersey Resources Corp. stock shrunk 2.61% to end the session at $39.25, and National Fuel Gas Co. ended 2.26% down at $54.89, all on above-average volumes.

Southwest Gas Holdings Inc. shares climbed 3.50% to reach $82.46 at close on active volume.

The SNL Gas Utility Index was down 1.37% to 587.67 at close.

In power, 8point3 Energy Partners LP lost 3.77% to close an active day at $14.80.

In renewables, SunPower Corp., TerraForm Power Inc and First Solar Inc. stocks took losses. SunPower declined 3.40% to close at $9.10 on below-average volume, TerraForm Power retreated 3.75% to finish the day at $11.54 on high volume, and First Solar shares decreased 2.10% to end the day at $69.15 on slim volume.

The SNL Merchant Generator Index lost 0.87% to 104.45 at the finishing line.

In electric utilities, PNM Resources Inc. shares slid 1.96% on light volume to $42.50. The holding company amended its $100 million term loan agreement to extend the maturity date to Dec. 14, 2018, from Dec. 21, 2017.

Xcel Energy Inc. will voluntarily transfer its stock exchange listing to the Nasdaq Global Select Market from the NYSE after market close Dec. 29. The utility's stock was down 1.52%, closing at $49.33 on above-average volume.

The SNL Electric Company Index retreated 1.62% to 486.94 at the closing bell.

January 2018 natural gas futures seesawed through the session in a range from $2.692/MMBtu to $2.769/MMBtu. Early selling led to renewed short-covering gains off the low, but ultimately the bears were reinvigorated and the contract settled back in the red, 5.3 cents lower at $2.692/MMBtu.

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