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Shares of power producers provided a safe-haven trade on Thursday as bleak U.S. economic data reignited fears of a potential recession and sent investors into defensive sectors.
Institute for Supply Management reports index measuring U.S. factory activity It fell to 46.8% in July, down 1.7 percentage points from June and lower than the 48.9% forecast by Dow Jones.
The S&P Global Manufacturing PMI in the United States fell to 49.6 in July from the June preliminary reading of 51.6 as new orders fell for the first time in three months and construction spending fell for the second consecutive month in June.
Following a series of disappointing data, the 10-year Treasury yield fell below 4% for the first time since February.
The S&P Utilities Index jumped to its highest level in 2-1/2 years and some power company stocks rose to 52-week highs as fixed income yields fell sharply and investors sought the safety of less volatile stocks with stable dividends .
Among utility stocks rising to 52-week highs: Southern Company (NYSE: SO) +4.8%Pinnacle (PNW) +3.9%Dominate Energy(D) +3.7%American Electric Power (AEP) +3.2%Duke Energy (all) +3%Consolidated Edison (ED) +2.7%CMS Energy(CMS) +2.4%DTE Energy (DTE) +2.3%Edison International (EIX) +2%First Energy (FE) +1.9%Sampra(SRE) +1.7%Nickel Source (NI) +1.6%.
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