One beneficiary of the Brexit fallout is the utilities sector, as the Dow Jones Utility Average is surging 1.4% to new record while Treasury yields tumble to multiyear lows. Shares of utility companies tend to offer relatively high and stable dividend yields, so investors often find them more attractive when interest rates are falling. The global macro uncertainty created by the U.K. vote last week to leave the European Union has led to a rally in U.S. Treasurys, which are seen as a safe-haven play, and a drop in yields. The yield on the benchmark 10-year Treasury note fell about 12 basis points to a four-year low 1.460%. Within the Dow utilities, shares of American Electric Power Co. gained 1.2% and NiSource Inc. advanced 0.4%, with both on track to for record closes. Elsewhere, shares of Southern Co. rose 1.6%, Duke Energy Corp. tacked on 1.3% and Public Service Enterprises Group Inc. ran up 1.1%. The implied annual dividend yield for the Dow utilities is 3.1%, according to FactSet, above the S&P 500 dividend yield of 2.3% and more than double the 10-year Treasury yield.
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