Utilities' Stocks Rocked As Expectations Of a Rate Hike Increase

By MarketWatch Pulse

Shares of utility companies are taking a beating Friday, as increasing expectations of an interest rate hike sooner than later has weighed heavily on the high-yielding sector. The SPDR Utilities ETF slumped 3.8%, with 28 of its 29 equity components losing ground. Among the sector tracker's most active components, shares of Southern Co. shed 4.3%, Xcel Energy Inc. dropped 4.3%, Duke Energy Corp. lost 5.1%, Exelon Corp. slid 2.6% and CenterPoint Energy declined 5.8%. A much stronger-than-expected October jobs report has led investors to believe the Federal Reserve is now likely to raise interest rates in December. Higher rates would make high-yielding stocks like utilities less attractive. The utilities ETF has a dividend yield of 3.7%; the 10-year yield has jumped about 0.09 percentage points to a 3 1/2-month high of 2.333%.

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