A strong run of earnings reports today, along with a somewhat influential analyst note, are taking energy stocks higher in today's trading session.
The oil and gas sector and the coal group both enjoyed gains. The
Dow Jones U.S. Energy Index
picked up a small gain of 0.2% by the afternoon, as oil and gas rode into the green on this morning's positive earnings reports from
( ENE) and
. Those results came on the heels of
earnings report yesterday, and all three companies beat analysts' estimates.
Reliant posted first-quarter earnings of 72 cents a share, topping the consensus
Thomson Financial/First Call
estimates of 70 cents. The strong first quarter, plus an adamantly positive outlook for the future sent the stock up 3.6% to $48.68. Enron, which also posting earnings well above estimates, reported a bottom line of 47 cents a share. Estimates came in at 45 cents. Enron was trading up by 2% to $60.64.
Dynegy, which posted net income of 41 cents a share, surpassed the consensus forecast by a penny, and the stock rose 4.6% to $55.58.
The Dow Jones U.S. Gas Utilities Index
is up 0.4% today, while the combination
Dow Jones U.S. Oil & Gas Index
"As a group, I think
oil and energy stocks are going to do well for the long-haul," said Doug Myers, vice president of trading at
. He added that he wouldn't be surprised if in the near-term the market saw a "nice 10% jump across the board" in energy stocks.
Amex Natural Gas Index
rose a little more than 1% on today's earnings news, while the
Chicago Board Options Exchange Oil Index
Other well known names in the sector are slightly mixed in performance.
( CHV), an integrated petroleum company, lost 50 cents to $93.30. Oil services company
, posted a gain of 0.6%.
Lifting the coal side of the larger energy sector was a note put out this morning by
analyst Peter Ward, who initiated coverage of
Ward, an energy and power analyst, tacked a buy rating on the coal producer, noting that "fundamentals for low-sulfur coal have never been better. In the past few months, the coal market has reversed a 20-year trend and become a sellers' market." Those seemed like just the right words to send Massey's stock up to a 52-week high of $25.30, before the issue settled back to $25.15. Massey, currently the sole component of the
Dow Jones U.S. Coal Index
, sent the index on the same ride.
Ward also issued a notes on competitors
, raising Arch's estimates. "Frankly, Arch is a better pick" than Massey, Ward said in a telephone interview. Arch was recently up $1.37, or 3.9%, to $35.15.
As commodity indexes show prices on the rise since the start of April, Myers noted that "the end-users are going to have to pay substantially higher prices for their energy use," citing the recent problems in California as one specific example. As a result, he sees "increased space for better margins."
Since the start of April, the Dow Jones oil, gas and energy indexes have each been on a steady rise.