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utilities - misc comments


S&P 500 has advanced 32% since the March bottom, the Utilities Sector SPDR is up just 15%.

Reasons For Utilities Underperformance

1. Weak Demand: The weak economy has quashed demand.

2. Governmental Interference: Because of the the recession, most state regulators are reluctant to grant healthy rate increases. 

3. Investor Preference: Inves... have been buying more volatile stocks.

4. Competition By Bonds: The up-tick in bond yields is also pressuring utility stocks.

5. Worries about Cap & Trade

If there is another explosion in electrical utilities' energy costs, many utilities will have difficulties passing these costs on (their regulators will be slow in allowing price increases).