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Energy & Utilities Roundup: Market Talk

11 Nov 2017 9:20 am

The latest Market Talks covering Energy and Utilities. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

2005 GMT - US stocks end slightly lower and notch their first weekly loss since September. The Dow falls 0.2% to 23422, the S&P is off 2 points to 2582 and the Nasdaq adds just under a point to 6750. The WSJ Dollar Index falls 0.1% over doubts Republicans will be able to pass a tax overhaul. Oil prices fall 0.5% to $56.86 as the markets continue to be shaken by high-profile arrests in Saudi Arabia. Energy companies lead the S&P lower, with National Oilwell Varco down 3% and Apache off 2.4%. Gold sinks 0.9% to $1276. (jonathan.vuocolo@wsj.com; @jonvuocolo)

1639 GMT - A committee charged to decide if investors in the credit default swap market should be paid after PdVSA's payment for a maturing bond due Nov. 2 didn't arrive in time, have decided to put off the decision until Nov. 13 at 12 pm. Investors asked for the ruling from the International Swaps and Derivatives Association after a $1.1B bond payment failed to appear within a three-day window that triggers the payments. The payment has now arrived, according to investors. The committee says they will meet Monday to determine whether there is adequate publicly available information to answer the question. PdVSA has claimed in the past that payments were made on time but were held up because of transfer issues related to US sanctions. (julie.wernau@wsj.com)

1503 GMT - Junk bonds seem to be stabilizing Friday but their recent weakness led one company to cancel a planned bond sale Thursday. That marked the first pulled deal since June, according to LCD, a unit of S&P Global Market Intelligence. Merchant power producer NRG Energy was hoping to sell $870M of bonds due 2028 in an effort to pay down its 2023 notes, but its 5.75%-yield offer was too low for investors, who wanted at least 6%, according to two investors. Four other high-yield companies did sell bonds Thursday, a sign that the market is still open for issuers. Recent selling has been especially heavy in bonds backed by wireline telecom companies, such as Frontier Communications, but FTR's 11% 2025 bonds were stable Friday, having last changed hands at 77.25 cents on the dollar, according to MarketAxess. (sam.goldfarb@wsj.com)

1533 GMT - Gas Natural Fenosa should use part of the EUR2.5 billion proceeds from the disposals it announced this year to pay higher dividends, says Credit Suisse, as it considers it "unlikely" that the Spanish gas and electricity company will entirely use those earnings for debt reduction. Credit Suisse analysts also warn that investing in mergers and acquisitions would be a risky option. Following the publication of Gas Natural Fenosa's nine-month results, Credit Suisse rates it as neutral and lowers its target price to EUR18.4 from EUR18.6. Shares trade flat at EUR18.2. (marc.navarrogonzalez@dowjones.com)

1244 GMT - Total's acquisition of Engie's main LNG assets should be value accretive, says Deutsche Bank, noting that it nevertheless raises questions on capital allocation. "We see the merits of the deal as weighted very heavily towards the potential they offer Total's existing activities and growth in LNG rather than the cash flow that they generate today," says the bank. But, although the deal makes "considerable sense", Deutsche Bank is less comfortable about allocating EUR1.5 billion ($1.74 billion) into purchases at a time when the company persists with scrip issuance to strengthen its balance sheet and add flexibility. "Balance is starting to feel wrong," notes the bank. (alberto.delclaux@dowjones.com)

(END) Dow Jones Newswires

November 11, 2017 04:20 ET (09:20 GMT)

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