Wall Street regained momentum on Friday, Jan. 20 as Donald Trump was sworn in as the 45th U.S. president. However, gains in energy equities were stunted by electric utilities closing flat and coal companies bucking the broader markets' upward trend.
The Dow Jones Industrial Average edged up 0.48% to 19,827.25, the S&P 500 climbed 0.34% to 2,271.31 and the SNL Energy Index gained 0.20% to 283.61.
Trump's inauguration ushers a new era of national energy policy that will likely include fewer regulations, especially with regard to climate change, and a more pro-development stance on fossil fuel production from federal lands and waters.
After years spent battling the Obama administration over energy and environmental policies blamed for the industry downturn, coal is now welcoming a new president who it hopes will come through on promises to revive the sector and "put miners back to work."
Coal shares were dragged by Peabody Energy Corp., which plummeted 57.29% to $1.70, after its former executive Fred Palmer filed an objection to the company's plan of reorganization. In his objection, Palmer claims a plan to give management 10% ownership of the new Peabody by canceling the stock of existing shareholders is a "gross breach of debtor's fiduciary and trust duties."
Like other shareholders who have objected to the plan, Palmer insists there is value to be recovered from Peabody, the largest private-sector coal company in the world, now that the coal market has improved.
In other coal stocks, Walter Energy Inc. sank 8.33% on thin volume to close at 14 cents, Foresight Energy LP settled down 2.68% in below-average trading to $7.25, but Cloud Peak Energy Inc. saw an increase of 2.90% on weak volume to finish at $5.33. The SNL Coal Index dipped 0.10% to 75.77.
Power producers swung back to positive territory as the SNL Merchant Generator Index added 0.36% to 87.87.
NRG Energy Inc. rose 3.53% in brisk trading to $16.11, after repricing its $1.9 billion term loan B with a maturity date of June 2023. The repricing is expected to save the company about $60 million in interest over the remaining life of the loan and approximately $9 million in 2017.
Trailing NRG, Atlantica Yield plc climbed 1.55% on strong volume to end at $21.65, while NextEra Energy Partners advanced 1.01% in light trading to settle at $27.92.
Gas utilities clocked in the largest gains in the sector as the SNL Gas Utility Index moved forward 0.56% to 536.32. Among components, WGL Holdings Inc. picked up 0.88% to $79.03, ONE Gas Inc. closed 0.86% higher to $63.69 and Southwest Gas Holdings Inc. ascended 0.78% to $77.97, all on average volume.
February natural gas futures reversed prior-day gains in the week's closing session Friday, Jan. 20, having digested the latest storage report that outlined a larger-than-anticipated and larger-than-average withdrawal from inventories, and with weather remaining unsupportive. The contract crashed through key support at $3.25/MMBtu and $3.200/MMBtu, posting an intraday low at $3.195/MMBtu, before closing the session down 16.4 cents at $3.204/MMBtu.
Market prices and index values are current as of the time of publication and are subject to change.