Utility stocks rose slightly Wednesday as investors moved toward safer stocks as the broader market came under pressure.
The Dow Jones Utility Average gained a fraction of a percent to 476.28 in late morning trading as the Dow Jones Industrial Average lost more than 135 points and the S&P 500 Index fell nearly 14 points.
Investors tend to buy utility stocks during periods of market turmoil because they provide reliable gains and dividends, though growth is more limited by government regulations than other, riskier investments.
Goldman Sachs analyst Michael Lapides upgraded regulated and diversified utility sectors to "Attractive" from "Neutral" in a note Wednesday. The analyst cited "expected economic weakness, strong earnings growth and positive commodity exposure for many names."
Lapides upgraded American Electric Power Co. to "Buy" from "Neutral." He maintained a positive view on other stocks rated "Buy" including Sierra Pacific Resources, Cleco Corp., PG&E Corp., NRG Energy Inc., Reliant Energy Inc., Sempra Energy and Edison International.
Lapides forecast an average return of 20 percent for regulated utilities, 10 percent for diversified utilities and 31 percent for independent power producers.
In morning trading, AEP rose $1.34, or 3.3 percent, to $41.59; Sierra fell 2 cents to $12.51; Cleco added 10 cents to $22.27; and PG&E gained 18 cents to $36.96.
NRG rose 84 cents, or 2.2 percent, to $38.78; Reliant rose 59 cents, or 2.6 percent, to $23.49; Sempra rose 72 cents to $51.47; and Edison rose 94 cents, or 2 percent, to $49.18.
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