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Tuesday's Energy Stocks: Edison International down 12.78% as wildfires rage

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Tuesday's Energy Stocks: Edison International down 12.78% as wildfires rage

Wall Street finished lower Tuesday, Dec. 5, with energy benchmarks joining the trend.

The Dow Jones Industrial Average closed 0.45% lower at 24,180.64, and the S&P 500 ended the session losing 0.37% to 2,629.57. The SNL Energy Index retreated 0.97% to end the day at 288.05.

Edison International shares plummeted 12.78% to close at $70.00 on roughly ten times average volume as wildfires raged across its Southern California service territory. The actual cause of the fire was undetermined but Edison's battered stock was likely driven by investor concerns over California's unique "inverse condemnation" policy, under which utilities can still be held liable for wildfire damage.

According to Guggenheim Securities analyst Shahriar Pourreza, Edison International's share price deterioration eroded at least $3 billion of its market cap, "which could be viewed as damages implied by the market that [Edison] could be on the hook for, implying upwards of [$4 billion] of damages if we assume they're deductible, but too soon to make an educated assessment of whether or not that amount is excessive," Pourreza wrote in a Dec. 5 note.

Among other large entities, ALLETE Inc. stock decreased 2.16% to settle at $78.65 on above-average volume.

The SNL Electric Company Index closed 9.58% lower at 460.06.

The SNL Midstream Energy Index fell 0.63% to 104.63 at market close.

However, NGL Energy Partners LP, CVR Refining LP, Marathon Petroleum Corp. and its master limited partnership MPLX LP outperformed the market.

Marathon Petroleum shareholder and former MarkWest Energy Partners LP CEO John Fox urged the company to lower the cost of curtailing the distributions it receives from MPLX. MarkWest merged into MPLX in 2015. Marathon shares increased 1.96% to reach $64.54 on above-average volume, and MPLX gained 2.24% to close at $36.44 on average volume.

NGL Energy Partners saw its shares grow 6.64% to $12.85 at market close on light volume, and CVR Refining added 3.97% to close at $13.10 on strong volume.

In the gas utility sector, Southwest Gas Holdings Inc. lost 2.64% to close at $83.40 on slim volume, and New Jersey Resources Corp. shed 2.26% to finish the day at $43.30 on heavy volume. The SNL Gas Utility Index declined 0.27% to 617.43 at close.

In renewables, Canadian Solar Inc added 2.36% to finish at $16.50 on above-average volume. China-based Shenzhen Energy Group Co. Ltd. won Federal Energy Regulatory Commission clearance to acquire upstream ownership in six operating solar farms in California from Canadian Solar in a $232 million deal.

First Solar Inc. shares added 6.88% to close at $61.21 on high volume. The solar panel manufacturer initiated full-year 2018 EPS guidance at a range of $1.25 to $1.75 on forecast net sales between $2.3 billion and $2.5 billion.

TerraForm Power Inc. stock gained 1.52% to finish slow trading at $11.37, and SunPower Corp. shares spiked 5.15% to close at $7.45 on active volume.

Dynegy Inc. lost 3.57% to close at $11.36 on light volume, and Covanta Holding Corp. trimmed 2.62% to end at $14.85 on below-average trading volume.

The SNL Merchant Generator Index slid 2.04%, closing at 98.19.

NYMEX January 2018 natural gas futures posted another day of losses, pressured by healthy supply outlooks and despite the anticipated boost in demand associated with cold weather moving into the Northeast and Midwest in the midrange period. The contract settled 7.1 cents lower at $2.914/MMBtu.

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