Utility stocks are being dragged lower on a profit warning from global power producer AES Corp (AES).
AES Weekly Chart
The price of AES stock has been cut in half after the company warned that earnings would come up well short of previous guidance. AES cited currency weakness and a drop in British electricity prices as the main reasons for the earnings shortfall. AES stock was already in trouble when it dropped below support at $34.75, but today's $11.47 drop puts the stock within $1.25 of support at $11.50.
Duke Energy Weekly Chart
Duke Energy (DUK), a leading domestic energy provider, is also down 4.44% in sympathy. DUK is trying to hold above support at $35.36, but could see a drop to $32.43, a 61.8% retracement and the 200-week moving average, if the selling continues.
Dow Jones Utilities Average Weekly Chart
Last week the Dow Jones Utility Index (UTIL) broke support at 334, and this week's decline has taken out 306. With not much support between here and 268, it could be a power outage for utility stocks.