Utilities Discover No News Is Good News on Fed's Rate Decision
- Sector beat broader market after Fed leaves rates unchanged
- Steady dividends attractive in near-zero rate environment
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Sometimes no news can be great news -- just ask U.S. utility companies.
Owners of electric utilities outperformed every other sector in the Standard & Poor’s 500 Index Thursday as the Federal Reserve decided not to raise interest rates. Utility stocks are especially sensitive to rates because of the companies’ huge expenditures on capital projects and the threat of lagging rate increases from regulators when costs increase. They also offer investors steady dividends when rates are low, making them attractive in the current near-zero environment.