Legal Troubles at Exelon Weigh on Utilities Stocks
October 17 2019 - 1:54PM
Dow Jones News
By Alexander Osipovich
Mounting legal troubles at Exelon Corp., the largest operator of
nuclear plants in the U.S., are weighing on the utilities
sector.
Shares of the Chicago-based electricity company fell 2.5% in
midday trading, extending their losses for the month to more than
9%. Earlier in the session, they hit an intraday low of $43.42, a
level the stock hadn't touched since last December.
The chief executive of Exelon's utilities unit abruptly retired
Tuesday, less than a week after the company said it had received a
second grand-jury subpoena from federal prosecutors looking into
its lobbying activities in Illinois.
Potential indictments of Exelon lobbyists or executives could
derail a bill that would help keep the company's Illinois nuclear
power plants in business, analysts at Mizuho said in a report on
Wednesday. An Exelon spokesman said he couldn't comment on the
subpoenas or the executive's departure beyond what the company had
said in regulatory filings.
Exelon's woes have come during a tough month for utilities,
which investors generally see as a defensive play.
The utilities sector of the S&P 500 is down 2% since the
beginning of October, making it the index's second-worst-performing
segment. The S&P 500 has gained 0.6% this month. Utilities
stocks outperformed the S&P 500 in September as investors
pulled back from riskier assets.
The U.S. nuclear industry has struggled in recent years with
competition from cheap natural gas-fired power plants. The Illinois
bill, backed by Exelon as well as some clean-energy groups, would
allow the company's nuclear plants in the state to collect payments
under a program meant to encourage investment in carbon-free
generation.
Write to Alexander Osipovich at
alexander.osipovich@dowjones.com
(END) Dow Jones Newswires
October 17, 2019 13:39 ET (17:39 GMT)
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