Sector Update: Energy Stocks Fall As Crude Rally Stalls; Williams Cos. Rising After Deutsche Bank Upgrade


Top Energy Stocks

XOM -1.27%

CVX -0.39%

COP -0.88%

SLB -0.56%

OXY -0.89%

Energy stocks were lower with the NYSE Energy Sector Index sinking 0.5% while shares of energy companies in the S&P 500 also were down 0.5% as a group. Crude oil for July delivery was down 2 cents at $106.88 per barrel while July natural gas was little changed at $4.70 per 1 million BTU.

In company news, Williams Companies ( WMB ) shares were higher Tuesday following an upgrade of the oil and gas pipeline company to Buy from Hold at Deutsche Bank, which said it continues to see upside potential for the stock following its planned $6 billion acquisition of Access Midstream Partners ( ACMP ).

The research shop also set a $67 price target for WMB shares.

Separately, WMB late Monday announced plans to sell $3 billion in new stock to help finance the upcoming ACMP purchase. It would be the largest follow-on offering since Facebook ( FB ) sold $3.9 billion in equity late last year.

Under terms of the proposed deal, WMB would purchase the 50% general-partner ownership stake in ACMP it already doesn't own as well as buying 55.1 million ACMP limited-partner units, boosting its ownership interest in the limited partnership to 50%. After the deal has its expected Q3 close, WMB plans to increase its quarterly dividend by 32% to $0.56 per share.

WMB shares were up 3.4% at $57.92 each in mid-day trade, earlier rising to a session high of $58.45 a share. The stock has a 52-week range of $31.25 to $59.68 a share, climbing nearly 80% over the past 12 months. ACMP shares are down 3.9% at $63.95 apiece, giving back nearly all of its 4.2% rise over the past two sessions.

In other sector news,

(+) FST, (+15.2%) Sabine Oil & Gas reassures investors it has sufficient funding in place to complete its acquisition of the company. FST shares tumbled yesterday following reports Sabine had withdrawn an $850 mln loan.

(-) TAT, (-2.7%) Selected to the Russell Global Index, effective June 30.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: WMB , ACMP , FB

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