The Fed’s go-slow approach to raise rates came in the backdrop of a slowdown in economic growth in early 2015. The Fed said economic growth “moderated somewhat” following its December’s view of economic activity increasing at a solid pace. The central bank trimmed its growth forecast for 2015 to 2.3-2.7% from an earlier forecast of 3%. At the same time the apex bank raised concerns that inflation measures were short of expectations, due to a slump in energy prices as well as low import prices. Speaking at the news conference, Yellen said inflation would remain below 1% over the year. The price index for personal consumption expenditures which is the Fed’s preferred measure of inflation rose only 0.2% in January. This was the lowest level experienced since Oct 2009, when the gauge increased 0.1% 3 Stocks That Gained Ahead of the Fed statement, investors were selling income generating stocks including utilities on anticipation of an imminent hike in short-term interest rates. However, the Fed’s move to open the door for a rate hike helped these stocks end in the green. The Utilities Select Sector SPDR XLU gained 2.7%, the second highest gainer among the S&P 500 sectors. Key stocks from the sector including The AES Corp. AES, Duke Energy Corp. DUK, Ameren Corp. AEE and Southern Company SO increased 3.7%, 1.8%, 2.3% and 1.9%, respectively. Below we present three stocks from the sector which moved upward yesterday, each of which also has a good Zacks Rank. WGL Holdings Inc. WGL is a public utility that delivers and sells natural gas and offers other related energy services and products. WGL Holdings holds a Zacks Rank #2 (Buy) and gained 4.6% yesterday. The company has expected earnings growth of 5.8%. The forward price-to-earnings ratio (P/E) for the current financial year (F1) is 19.90. Northwestern Corp. NWE which conducts its business operations as Northwestern Energy is one of the largest providers of electricity and natural gas in the northwest quadrant of the United States. Northwestern Corp holds a Zacks Rank #2 (Strong Buy) and gained 2.5% yesterday. The company has expected earnings growth of 7.5% and P/E (F1) of 16.70. Public Service Enterprise Group Inc. PEG is a diversified utility holding company. Its operations are mostly located in the Northeastern and Mid-Atlantic parts of the U.S. Public Service Enterprise Group holds a Zacks Rank #2 (Strong Buy) and gained 2.4% yesterday. The company has expected earnings growth of 4.1% and P/E (F1) of 14.62. Interest-rate sensitive sectors react more to movements in rates than in anticipation of renewed growth. Given the Fed’s current stance, it is likely that rates will not increase till the middle of the year and then increase only gradually. This is why these stocks would make for a prudent choice. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AMEREN CORP (AEE): Free Stock Analysis Report SOUTHERN CO (SO): Free Stock Analysis Report DUKE ENERGY CP (DUK): Free Stock Analysis Report AES CORP (AES): Free Stock Analysis Report PUBLIC SV ENTRP (PEG): Free Stock Analysis Report WGL HLDGS INC (WGL): Free Stock Analysis Report SPDR-UTIL SELS (XLU): ETF Research Reports NORTHWESTERN CP (NWE): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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