- Market Commentary -

February 19, 2010 (FinancialWire) — Dr. Joe Duarte (http://www.joe-duarte.com) recently noted: Southern Company (NYSE: SO) got an $8 billion federal loan guarantee leading to a small bounce in the stock.

Duarte added: Shares of The Southern Company didn’t quite go nuclear on Wednesday. But the stock seems to have bottomed and is worth watching.

Think of this stock as a bellwether for investor attitudes toward nuclear power plants and their future. And the reaction has been muted, for obvious reasons. It takes a long time and a lot of money to build a nuclear plant.

Also risk is high, both from the potential damage that can be caused by rare malfunctions, but also because government backing is crucial since investor interest is tepid.

The rise of the potential for small reactors as an alternative to the traditional large reactors is an interesting development. But more than anything this is a slow moving trend.

Yet, it looks as if Southern Company has made a bottom of sorts and is worth watching. The other aspect of utility stocks is that they are interest rate sensitive and function on borrowed capital. Their lack of a rally recently suggests that investors may also be worried about higher interest rates in the not too distant future.

Duarte’s conclusion: The take home message is that nuclear power is back on the drawing board and in a big way, at least from a news generating point of view. For investors it’s hard to figure out which companies will benefit as many of the firms that build reactors or components are divisions of larger conglomerates.

They key may be to just monitor the story and see what happens. Still, with the fanfare coming out of the White House, nuclear power seems to be getting a new lease on life.

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Duarte partners with the Investors Resource Center at Investrend Information (http://www.investrendinformation.com).

Duarte’s IntelligentForecasts.com (http://www.intelligentforecasts.com) provides free news coverage and analysis, and his daily articles and news summaries offer recommendations and analysis for ETFs, and individual stocks in the technology, health and biotechnology, and energy sectors. Duarte has combined expertise in health care, energy, and the effects of politics and global intelligence on the financial markets offer a unique blend of insight and information to thousands of active investors and political and intelligence aficionados around the world on a daily basis.

He is the author of: Futures And Options For Dummies, Successful Energy Sector Investing, Successful Biotech Investing and co-author of After-Hours Trading Made Easy. In early 2001, in Successful Energy Sector Investing, he correctly predicted that Venezuela’s political problems could lead to an energy crisis in the United States. He has also appeared as a weekly guest on Market Mavens Radio and has logged appearances on KNX radio in Los Angeles, Financial Sense.com radio, and Wall Street Radio.

One of CNBC’s original Market Mavens, Dr. Duarte has been writing about the financial markets since 1990. His articles and commentary have been featured on CBS Marketwatch, Barron’s, Smart Money, Medical Economics, and in Technical Analysis of Stocks and Commodities magazines. In 2003, Doctor Duarte received second place, in the professional section, of the Medical Economics Investment Challenge with a 12-month return of 42%.

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