Energy stocks rebounded Tuesday after suffering across-the-board losses the previous day when Wall Street went into shock after the House rejected a massive $700 billion bailout plan for financial markets.
The about-face in the stocks of oil and natural gas producers, gas pipelines, oil and gas utilities and marketers was fueled by news that the Bush administration and Capitol Hill lawmakers were not giving up on a plan to rescue the investment banks, and by the frenzied buying pace in the stock market as investors searched for bargain-basement prices.
The House rejection of the bailout plan resulted in more than $1.2 trillion in losses in the stock market Monday — more than the cost of the bailout plan. President Bush, in an attempt to calm market jitters, pledged Tuesday that this was “not the end of the legislative process” on Capitol Hill. He said his administration would continue to work with both houses of Congress to “help lenders resume the flow of credit to consumers and businesses.”
The Dow Jones Industrial Average Tuesday recovered more than half (485 points) of the 778 points it had lost on Monday. The S&P Index picked up 58.32 points, accounting for half of the 106 points lost earlier in the week. Nasdaq rose 98.60 points, after falling 199.64 points Monday (see Daily GPI, Sept. 30). Energy commodities rebounded as well. November natural gas futures gained 21.7 cents on Tuesday to close at $7.438 and November crude futures added $4.27 to finish at $100.64/bbl (see related story).
Shares of major oil and gas producers appeared to have recovered the losses that they suffered Monday. Marathon Oil (up 6.38%), Occidental Petroleum (8.38%), ExxonMobil (4.86%) and ConocoPhillips (5.68%) showed the biggest gains.
After recording heavy losses Monday, the shares of independent producers also picked up. Those racking up the biggest stock gains were Chesapeake Energy (up 10%), Plains Exploration and Production (10.88%), Quicksilver Resources (11.09%) and Anadarko Petroleum (8.14%).
At the start of the week, the stock of Oklahoma City-based Chesapeake Energy, the largest domestic producer of natural gas, fell to a new 52-week low of $32.26, but it rebounded to $35.16 Tuesday.
The major pipeline companies recovered part of their losses Tuesday. The shares of El Paso Corp. shot up 13.42%, while the stock of The Williams Companies rose by 8.24%, National Fuel Gas went up 6.11% and Dominion Resources increased 1.88%.
Major electric utilities — AES Corp., CMS Energy, DTE Energy, Florida Power & Light, Pacific Gas and Electric and Xcel Energy — posted modest gains Tuesday, recouping the small losses from earlier in the week.
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