Utilities posted steep losses Wednesday, Dec. 14, following the Federal Open Market Committee's decision to lift the target range of the central bank's key interest rate to between 50 basis points and 75 basis points.
Major players tallying losses for the day included Consolidated Edison Inc., down 2.82% to $71.21; Duke Energy Corp., falling 2.32% to close at $75.53; and Dominion Resources Inc., giving up 2.41% to finish at $74.12, all on above-average volume. The Dow Jones Utility Index lost 2.13% to 645.05.
The committee voted unanimously to lift the target range for the federal funds rate, noting in its Dec. 14 statement, "Job gains have been solid in recent months and the unemployment rate has declined." It further added that it was raising its target rate "in view of realized and expected labor market conditions and inflation."
The SNL Energy Index shed 2.05% to 273.79, while the impact on broader indexes was relatively marginal. The Dow Jones Industrial Average Index fell 0.60% to 19,792.53 and the S&P 500 slipped 0.81% to 2,253.28.
NiSource Inc. dipped 1.99% on heavy volume to close at $21.66, despite an upgrade from Citibank. The financial services firm upgraded the company to "buy" from "neutral" based on its robust $30 billion backlog of growth projects, strong regulatory environment, positive customer growth, and attractive valuation.
Vectren Corp. shares shed 1.04% in above-average trading to end at $51.41, after Citibank raised its rating to "buy" from "neutral" on the back of its attractive valuation in light of its strong growth outlook in Indiana and Ohio and robust construction services business.
Atmos Energy Corp. shares dropped 2.08% on average volume to finish at $72.41, National Fuel Gas Co. shed 1.92% in slightly above-average trading to settle at $57.21, and WGL Holdings Inc. lost 2.93% on average volume to end at $76.56.
The SNL Gas Utility Index tumbled 2.31% to 526.02.
In the midstream sector, shares of Spectra Energy Corp dropped 2.73% in below-average trading to settle at $40.63, after the company, along with Enbridge Inc., reached an agreement with the U.S. Federal Trade Commission that sets the timing of the closing of their merger after they have provided additional information requested of them.
Shares of Enbridge receded 2.66% on light volume to close at $41.77.
Enterprise Products Partners LP declined 3.13% in brisk trading to finish at $25.35.
The SNL Midstream Energy Index gave up 2.14% to 115.76.
In the coal universe, giants Arch Coal Inc. lost 3.13% on light volume to settle at $79.23 and Alliance Holdings GP LP fell 1.43% on thin volume to end at $28.33.
The SNL Coal Index went down 1.53% to 80.08.
January 2017 natural gas futures ended a two-day losing streak Wednesday, as traders positioned ahead of the release of storage data that is expected to outline a large withdrawal for the week to Dec. 9. Book squaring ahead of the new year is contributing to market volatility. The contract seesawed throughout the midweek session between $3.444/MMBtu and $3.569/MMBtu and settled 6.6 cents higher at $3.540/MMBtu.
Market prices and index values are current as of the time of publication and are subject to change.