Posted on 01/03/2003 5:38:40 AM PST by MeneMeneTekelUpharsin
SAN JOSE -- Calpine Corp. shares surged 21 percent, leading a rally of energy company stocks on optimism their prices will recover after leading declines among U.S. equities last year, analysts said. Shares of Calpine rose 70 cents to 3.96 in New York Stock Exchange composite trading, the biggest one-day rise in almost two months. The company was among the 10 worst-performing stocks on the Standard & Poor's 500 last year along with Dynegy Inc., which rose 9.3 percent Thursday, and Mirant Corp., 8 percent higher.
Companies that sell wholesale electricity or trade power and natural gas tumbled in value last year amid a glut of power, a slump in trading and government probes of accounting. Investors often sell poorly performing stocks at year-end to claim losses for tax purposes, buying back in early the next year on optimism for a recovery in prices, according to analysts. "You want to be there when things turn around," said Williams Capital Group analyst Christopher Ellinghaus, who rates Calpine shares "buy" and owns some. "At some point, investors' outlook for these companies moves to 2004, and that could lift the shares."
Dynegy shares have surged by two-thirds since November when its new chief executive predicted the company will stay solvent. Also buoying San Jose-based Calpine, which generates much of its power in its home state, and other energy stocks is Tuesday's appointment of former utility executive Michael R. Peevey to lead the California Public Utilities Commission, said Argus Research Analyst Jeffrey Gildersleeve.
Atlanta-based Mirant Corp., which rose 15 cents to 2.02, also sells power in California, as does Houston-based Dynegy. AES Corp., which operates California power plants, rose 7.3 percent. It's based in Arlington, Va. "Peevey is seen as an industry man," said Gildersleeve, who rates Calpine shares "hold" and owns some. Peevey had been president of Edison International, owner of California's second-largest utility.
Peevey's appointment by California Governor Gray Davis, if confirmed by the state's senate, pushes out Chairwoman Loretta Lynch, who had clashed with Davis over how to resolve California's energy crisis two years ago, and had the commission sue generators and gas companies, accusing them of gouging. Williams, based in Tulsa, Okla., announced Tuesday it had settled power-contract disputes with California, ending the threat of lawsuits. The company also settled with the states of Washington and Oregon, and a number of municipalities.
Edison International and ChevronTexaco Corp. renegotiated a power contract with the state Tuesday, cutting power purchasing costs for the state by $121 million, while the state will drop claims of unjust pricing. Edison shares roe 86 cents, or 7.3 percent, to 12.71.
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Couldn't get back to it. If you would, go ahead and post it. Also, energy stocks dropping a little today. They'll trade up and down for a while. But, eventually, they'll come back (most of them) because power is a necessity.
If they lift calpine to 11 bucks, I'll finally be EVEN....Sad 2 say...
I have a friend who bought around $90+ and then at $45 when it split. He'll have to wait a while to break even. The stock and other energy firms as well have broken out and up in the past few days. It remains to be seen if they'll take off or not. Calpine has some 84 million shares sold short which have to be covered. They're making money. They have more plants about to come online to make even MORE money. So, they should be able to service the debt without too much difficulty. It remains to be seen which way the stock will go.
If it breaks $7-9 you should see a good bit of short covering. Something to watch, IMHO.
Wonder if we're going to see a major cold spell here?
Also, a related thread:
Click here for related FR thread.
For reading later...
For future reference and reading...
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