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Thursday's Energy Stocks: Markets, sector dip ahead of Trump inauguration

Broader markets and the energy sector suffered across-the-board losses on Thursday, Jan. 19, the day before Donald Trump's inauguration as the 45th U.S. president. The Dow Jones Industrial Average lost 0.37% to 19,732.40, while the S&P 500 stepped back 0.36% to 2,263.69. Energy equities sank by a larger margin as the SNL Energy Index slumped 0.74% to 283.03.

Coal stocks struggled to remain afloat before finishing the session in red as the SNL Coal Index saw a 0.10% decrease to 75.84. Among coal players, Arch Coal Inc. dropped 1.08% to end at $72.21 and Alliance Holdings GP LP receded 1.93% to finish at $26.91, but Alliance Resource Partners LP picked up 1.38% to $22.10.

Peabody Energy Corp. reaped 2.84% to settle at $3.98, after saying that it reached a settlement with an unsecured creditors' committee that could resolve potential objections to the company's reorganization plan. According to the agreement, the committee will get approval rights on matters that affect the amount of equity and cash distributions to holders of general unsecured claims that are not unsecured senior notes claims.

In power stocks, FirstEnergy Corp. slid 1.46% on average volume to close at $30.31, following the announcement that it will sell four competitive natural gas plants in Pennsylvania and its ownership in a Virginia hydroelectric plant.

Under a $925 million all-cash transaction, the power plants with a total capacity of 1,572 MW will be sold to a subsidiary of LS Power Group affilate LS Power Equity Partners III LP. "The sale of these plants is consistent with FirstEnergy's strategy of operating as a fully regulated utility company," the company said.

Covanta Holding Corp. declined 3.67% in above-average trading to finish at $15.75, following a downgrade by Barclays to "equalweight" from "overweight," with a price target of $16.00. Among other power producers, Ormat Technologies Inc. dipped 2.08% to $52.80, Dynegy Inc. retreated 1.72% to $9.70 and Pattern Energy Group Inc. shed 1.31% to $19.64, all on weak volume. The SNL Merchant Generator Index moved down 1.03% to 87.55.

Shares of Magellan Midstream Partners LP closed lower by 0.78% in below-average trading to $74.15. Its subsidiary Magellan Pipeline Company LP has settled Clean Water Act violations charges for about $18 million in penalties and remedies after pipeline spills in Texas, Nebraska and Kansas. Under the settlement with the U.S. Department of Justice and the U.S. EPA, Magellan Pipeline agreed to complete about $16 million of injunctive relief across its 11,000-mile pipeline system and pay a $2 million civil penalty.

FERC will investigate the natural gas transportation rates charged by Kinder Morgan Inc.'s gas pipeline companies Natural Gas Pipeline Co. of America LLC and Wyoming Interstate Co. LLC in 2014 and 2015, to see whether the two pipelines are "substantially over-recovering their costs, resulting in unjust and unreasonable rates." Kinder Morgan saw a 0.13% rise in brisk trading to finish at $22.47.

The SNL Gas Utility Index gave up 1.07% to 533.36, and the SNL Midstream Energy Index stumbled 0.51% to 122.23.

A storage report that outlined a larger-than-anticipated and better-than-average withdrawal from natural gas inventories for the week to Jan. 13 sparked a sharp gain in natural gas futures on Thursday, Jan. 19. February natural gas futures climbed to a $3.404/MMBtu intraday high, but trimmed gains to settle 6.6 cents higher at $3.368/MMBtu.

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