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Weekly Winners: Newmont and NRG Defy S&P's 37-Point Drop; Energy Stocks Also Gain

By Dan Caplinger - Mar 16, 2014 at 11:30AM

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Even though the Crimean crisis loomed large over the stock market last week, these stocks performed well. Find out why.

Last week, the S&P 500 ( ^GSPC -0.84% ) dropped 37 points, or about 2%, in the wake of investor nervousness about the situation between Russia and Ukraine as well as potential economic worries in China. Yet even though those concerns sent most stocks in the S&P down on the week, Newmont Mining ( NEM 2.63% ) was able to post an impressive 6% increase in its share price. Two companies in the energy industry -- Southwestern Energy ( SWN 1.78% ) and Marathon Petroleum ( MPC -2.62% ) -- also enjoyed solid gains despite the down market, as did NRG Energy ( NRG 0.03% ).

For Newmont, much of last week's stemmed from impressive performance in the gold market, which rose every single day last week. The same geopolitical worries that have knocked stocks for a loop have had the opposite effect in the precious-metals market, with some investors fleeing to gold as a safe-haven play in times of trouble. Not all of the news for Newmont was positive last week, as fears that an emerging Chinese debt crisis could have a further negative impact on the copper market could hurt that segment of the mining company's business. Overall, though, as long as gold stays on the rebound, Newmont will be in a good position to post further gains.

Meanwhile, several energy stocks did well, with Southwestern rising more than 5% and Marathon Petroleum following suit with a roughly 4.5% gain. Southwestern benefited from follow-through buying following an analyst upgrade from BMO Capital late the previous week. BMO boosted its price target on the stock by 11% to $50 per share, arguing that the natural-gas company has more exposure to rising prices than many producers. Given the extent to which many energy companies have shifted toward oil and liquids production, Southwestern's continuing exposure is a big play on rebounding nat-gas prices, which have been moving in the right direction lately.

For Marathon Petroleum, gains came amid the rising belief that greater domestic oil production will again cause spreads between West Texas Intermediate and Brent crude prices to widen, saving U.S.-based refiners substantial amounts of money to obtain crude-oil feedstock. Several of Marathon's peers also posted gains, but Marathon has also taken additional steps to take advantage of the situation, including upgrading its Detroit refinery to use heavy oil from sources like Canada's tar sands. That could give the company a further advantage.

Finally, NRG Energy rose 4.5% after making some big moves to expand its business last week, buying the retail electric business of Dominion Resources and getting access to its 600,000 customers. At the same time, NRG also learned that it will get to purchase nearly all of the assets of bankrupt Edison Mission Energy, whose reorganization plan got bankruptcy-court approval. The move will make NRG the country's third-biggest generator of renewable energy, with Edison's extensive wind-generation assets boosting its existing portfolio.

Look for winners
Even in down weeks, some stocks always do well. Knowing which ones they are and why they rose can be valuable in pointing you toward next week's winning trends.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$4,538.43 (-0.84%) $-38.67
Marathon Petroleum Corporation Stock Quote
Marathon Petroleum Corporation
MPC
$61.67 (-2.62%) $-1.66
NRG Energy, Inc. Stock Quote
NRG Energy, Inc.
NRG
$36.56 (0.03%) $0.01
Newmont Mining Corporation Stock Quote
Newmont Mining Corporation
NEM
$54.67 (2.63%) $1.40
Southwestern Energy Company Stock Quote
Southwestern Energy Company
SWN
$4.57 (1.78%) $0.08

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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