Energy Stocks Follow Declining Stock Market

Energy stocks of all persuasions generally followed the stock markets down throughout last week, the first week of trading after the cataclysmic events of Sept. 11.

On Friday, a few independent producer stocks turned up slightly after registering sharp drops earlier. Devon Energy, which started the week at about $43 per share, ended at $37.34, retracing from a Thursday close at $36.65. Apache Corp. dropped from about $50 on Monday, leveled off Thursday at about $42 and closed Friday at $42.31. Anadarko Petroleum also dropped from near $52, touching bottom Wednesday of about $47, and ending Friday at $47.30. Murphy Oil went from $77.50 on Monday to just above $70 on Wednesday and Thursday before springing back Friday to close at $73.05. Phillips followed the same pattern, starting at about $58 per share and rebounding slightly Friday to close at $54.17.

There was no relief for the majors, most of which, in contrast to independents, held up better the first two days of the week and fell from Wednesday on. The end result, however, was about the same. BP started the week in the high $40's, falling steadily to close at $44.25. ExxonMobil also continued to fall, starting the week at $40 and ending at $36.75. Royal Dutch/Shell went from $52.50 to $44 at the end of Friday.

One sign of the times was Consolidated Edison stock, which rose from $41 Monday to a $43 peak Wednesday when it completed the job of restoring power to lower Manhattan. Its glory was short-lived, however, as the stock closed at $41 on Friday.

Gas and electric utilities were generally down moderately throughout the week, but there were two notable exceptions. Pacific Gas & Electric, which revealed a reorganization plan, backed by creditors, to get it out of bankruptcy, gained 21% to close at $16.86.

Also making steady progress since Monday against the rising tide of declining energy stock prices was Atlanta, GA-based Southern Co. It wasn't hard to figure, as U.S. aircraft carriers steamed toward the Middle East, with fighter planes expected to follow soon. Southern has a secure fuel supply and owns no foreign facilities. Southern also has earnings per share of $1.56, a dividend of $1.34 and a yield rating of 5.22%. The company's stock gained about 8.33% over the week to close at $25.95.

"What you're seeing is that with the current uncertainty, Southern is viewed as a safe haven," company spokesman Marc Rice told NGI. "We have dependable earnings and we're a completely American business. We have no overseas business." In addition, Southern's power is about 70% coal-fired and about 20% from nuclear plants. "We're not vulnerable on the fuel side. We don't like to benefit from events like these, but it appears people are seeking certainty."

Pipelines El Paso Energy and Williams both registered declines. El Paso went from near $50 on Monday to close Friday at $44.49. Williams, whose stock was close to $30 a share on Monday dropped to $26.50 Thursday and then hit the comeback trail Friday after it announced management changes and restructuring. The closing quote Friday was $27.90. Northern Border Partners with a P/E of about 15, earnings of $2.33 per share, an annual dividend of $3.05 per share and a yield of 8.34%, went from about $39 at the beginning of the week to $37.02 Friday.

Duke Energy, which had held up through much of the week in the $38 to $39 range, dropped 4.03% to $37.17 Friday on the news it would buy Westcoast Energy. Among marketers, Enron dropped precipitously from about $32 on Monday to a low of about $26 Wednesday before recovering to close Friday at $28.30. Dynegy started the week at about $38 and closed it at $33.02.

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