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Monday's Energy Stocks: Covanta spikes 9.67%; broader markets hit new highs

Wall Street closed the Monday, Dec. 18, trading session with record highs while energy stocks finished mixed. The Dow Jones Industrial Average climbed 0.57% to end the day at 24,792.20, while the S&P 500 settled 0.54% higher at 2,690.16.

Shares of Covanta Holding Corp. jumped 9.67% on more than three times the average volume to close at $16.45, following news that it is forming a joint venture with Macquarie Group Ltd. subsidiary Green Investment Group Ltd. to develop, fund and own energy-from-waste projects in Ireland and the U.K.

The two companies plan to combine their respective U.K. development pipelines, with three projects each, for joint development and eventual acquisition by the joint venture. Prior to the U.K. pipeline combination, GIG will acquire through the joint venture a 50% stake in Covanta's Dublin energy-from-waste facility for €136 million, subject to working capital adjustments.

AES Corp. rose 1.39% in brisk trading to end at $10.95, after announcing a deal to sell a 51% equity interest in its Philippines subsidiary to SMC Global Power Holdings Corp. for $1.05 billion to pay down parent debt. The deal with SMC Global Power is expected to help AES achieve investment-grade metrics one year early, in 2019. Meanwhile, AES subsidiary DPL Inc. also struck a deal to divest 972.5 MW of power generation and related assets to Kimura Power LLC for $241 million in cash.

Among other utilities, CMS Energy Corp. dipped 1.22% in light trading to $48.65, Alliant Energy Corp. declined 1.87% on above-average volume to $43.60, PG&E Corp. was down 1.04% in light trading to $52.50, and Northwest Natural Gas Co. fell 3.92% in robust trading to $62.50.

Wells Fargo Securities LLC upgraded CMS Energy to "outperform" from "market perform," downgraded Alliant Energy and PG&E to "market perform" from "outperform" and lowered the rating of Northwest Natural Gas to "underperform" from "market perform."

"These ratings actions primarily reflect valuation considerations and do not reflect concerns with the fundamental outlooks," Wells Fargo analysts wrote in the report.

After announcing plans to develop two natural gas pipelines in addition to its previously announced Driftwood pipeline, Tellurian Inc. decreased 0.21% in active trading to settle at $9.57. The 625-mile, 42-inch-diameter Permian Global Access pipeline would be capable of transporting 2 Bcf/d of natural gas and would run from the Waha Hub in Pecos County, Texas, to Gillis, La.

TransMontaigne Partners LP retreated 1.86% on brisk volume to finish at $40.11, following the close of its acquisition of terminal facilities on the California coast from a Plains All American Pipeline LP affiliate. Plains climbed 3.06% on brisk volume to $20.91.

CONSOL Energy Inc. advanced 3.93% on strong volume to end at $29.85, after unveiling plans to repurchase up to $50 million of its outstanding common stock or its 11% senior secured notes due 2025 through the period ending June 30, 2019.

January 2018 natural gas traded solidly higher as the week began, supported by rising demand as cold weather lingers across major portions of the country. The contract settled at $2.745/MMBtu, 13.3 cents higher on the session.

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