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Monday's Energy Stocks: South Jersey sheds 9% on $1.7B deal; PG&E falls 7%

Shares of South Jersey Industries Inc. plunged 9.32% on about four times the average volume to close at $32.00 on Monday, Oct. 16, after the company agreed to acquire a pair of Southern Co.'s gas utilities.

The $1.7 billion deal would make South Jersey Industries, or SJI, the second-largest natural gas provider in New Jersey and would increase its near-term utility capital investment plans to $1.5 billion from 2018 through 2021, SJI executives said in a conference call. Southern Co. shares rose 0.39% in near-average trading to finish at $51.14.

SJI dragged the SNL Gas Utility Index 1.06% lower to 589.84 and the SNL Energy Index down 0.32% to 290.83. Meanwhile, broader markets peaked to record highs, with the Dow Jones Industrial Average reaching 22,960.12 before settling 0.37% up to 22,956.96. The S&P 500 hit 2,559.47 before closing 0.18% up to 2,557.64.

The following gas utilities also ended the trading session on the negative side of the ledger: National Fuel Gas Co. saw a decline of 1.41% in strong trading to end at $56.48, New Jersey Resources Corp. edged 0.81% lower on brisk volume to finish at $42.95 and Southwest Gas Holdings Inc. shed 0.79% in light trading to close at $79.26.

On the power side, Shares of PG&E Corp. fell again on Monday, down another 7.43% on more than 15 times the average trading volume to settle at $53.43. Investors continue to be wary of the liability risk the company may face as the investigation continues into what sparked ongoing deadly wildfires in Northern California.

Entergy Corp. gained 1.36% to $83.41 while El Paso Electric Co. retreated 1.89% to $57.00, both on strong volume. Jefferies LLC analyst Anthony Crowdell upgraded Entergy to "buy" and raised its price target and EPS estimates. Meanwhile, El Paso Electric was downgraded to "underperform" and its price target and EPS estimates were lowered. Both companies were previously at "hold" rating.

Pattern Energy Group Inc. declined 1.82% in robust trading to finish at $24.25, after Williams Capital Group initiated coverage of the company with a "buy" rating and a $28 target price.

TerraForm Power Inc. shareholders oversubscribed the stock option as a consideration regarding the company's pending merger deal with certain affiliates of Brookfield Asset Management Inc. TerraForm Power shares were down 3.67% on heavy volume to close at $11.56.

The SNL Merchant Generator Index ended 0.17% lower to 101.38.

In the coal sector, CNX Coal Resources LP lost 1.32% in brisk trading to close at $14.90, after reporting an estimated $3.3 million to $3.9 million net income for the third quarter compared to $6.4 million in the year-ago period. Its sponsor company, CONSOL Energy Inc., expects to post losses of $14 million to $36 million when it announces earnings Oct. 31, but it recorded a drop in production costs and continues to sell off noncore assets. CONSOL Energy slid 1.95% on below-average volume to finish at $15.56.

NYMEX November natural gas futures were lower Monday, Oct. 16, as the recent rally was exhausted by a lack of fundamental support. Trading in a range from $2.908/MMBtu to $2.977/MMBtu, the contract settled 5.4 cents lower on the session at $2.946/MMBtu.

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