The energy sector outpaced broader indexes, after coal shares led an across-the-board rally on Tuesday, April 4. The Dow Jones Industrial Average closed up 0.19% at 20,689.24, the S&P 500 moved up 0.06% to 2,360.16 and the SNL Energy Index finished 0.42% higher at 292.91.
Peabody Energy Corp. declined 12.10% to settle at $27.25, trading over three million shares on its first day back on the New York Stock Exchange. The world's largest private-sector coal producer is the last of the giant coal miners in the U.S. to emerge from bankruptcy. Peabody also had a rough start in the morning trading session, with its share price down 7.0% as of about 12:15 p.m. ET.
Other coal companies fared better, with Arch Coal Inc. adding 1.79% in strong trading to close at $72.85, Foresight Energy LP rose 3.69% on light volume to finish at $6.47 and Cloud Peak Energy Inc. advanced 2.21% in light trading to end at $4.62. The SNL Coal Index saw an increase of 1.03% to close the session at 72.33.
Gas utilities ranked second in gains, after coal, as the SNL Gas Utility Index climbed 0.95% to close at 570.78. Among components, Atmos Energy Corp. took in 0.95% in average trading volume to settle at $79.65, National Fuel Gas Co. spiked 1.45% on brisk volume to close at $60.24 and New Jersey Resources Corp. earned 1.79%, also on strong volume, to finish at $39.85.
Pembina Pipeline Corp. ticked up 2.04% in active trading to close at $32.02, a trading day after increasing its monthly dividend and updating its 2018 outlook. Pembina increased its monthly common share dividend rate by 6.25%, to 17 Canadian cents per share. The company is now targeting 2018 adjusted EBITDA of C$1.8 billion to C$1.9 billion.
On the power side, TransAlta Corp. declined 1.74% in weak trading to close at $5.65, and Capital Power Corp. receded 0.78% on thin volume to C$25.60, following downgrades from DBRS Ltd. The rating agency lowered the issuer rating and senior unsecured debt rating of Capital Power to BBB (low) from BBB and downgraded TransAlta's issuer rating and unsecured debt/medium-term notes rating to BBB (low) from BBB. All trends were changed to stable from negative.
DBRS believes that both companies' business risk profiles have weakened, particularly impacted by the expiration of all Alberta power purchase agreements by 2020 and the implementation of the Alberta Climate Leadership Plan to hasten the phase-out of all coal emissions by 2030.
The stable trends reflect the companies' agreement with the government of Alberta to receive a certain amount yearly for 14 years, in exchange for ceasing all of their coal-fired emissions by Dec. 31, 2030.
Among merchants, Dynegy Inc. was up 2.05% in weak trading to close at $7.98, First Solar Inc. added 1.86% on heavy volume to close at $26.82 and NRG Energy Inc. gained 0.80% on light volume to finish the session at $18.88.
The SNL Merchant Generator Index climbed 0.85% to 85.09, and the SNL Electric Company Index edged up 0.43% to 452.15.
May natural gas futures were sharply higher, reaching a level not seen since late January. The contract settled 16.5 cents higher at $3.293/MMBtu after trading a range from $3.121/MMBtu to $3.301/MMBtu.
Market prices and index values are current as of the time of publication and are subject to change.