Long Term Perspective

The Dow Utilities Average “slowed” to a 12.8 percent boost in 2006, following three consecutive years with increases exceeding 20 percent. The 10-year average growth rate in the Utilities average rose to 9.6 percent from 8.6 percent in 2005.

Short Term Perspective

The 15 utilities included in this index are: AES Corp., AEP, Centerpoint Energy, Consolidated Edison, Dominion Resources, Duke Energy, Edison International, Exelon Corp., FirstEnergy Corp., NiSource Inc., PG&E, Public Service Enterprise, Southern Co., TXU Corp., and Williams Cos.

The Dow Jones Utility index ended 2006 somewhere in between – not as robust as the Industrials and not as moderate as the Transports. The strong economy kept manufacturing and business activity healthy, boosting utilities’ profits. Utilities have had heavy demand from the strong U.S. economy but slowing in economic growth during the first half of 2007 has cut into growth in this index. But this index did rebound significantly over the August through October period before slipping in November. The Dow Utilities index up 16.8 percent year-on-year in November, versus up 19.3 percent in October and compared to a recent high of 30.6 in April of this year. For November, the Utility index is doing much better than its Dow cousins and is up 16.5 percent from December 31, 2006.

The Utilities index survived subprime and economic jitters in November better than most indexes, slipping only 0.5 percent and followed a 6.7 percent surge in October.