Utilities tumble after slightly hotter than expected inflation data (NYSEARCA:XLU)

Utility companies posted broad losses in Thursday’s trading, responding to a hotter than expected U.S. inflation report for December.

The U.S. Labor Department said core price, which strips out volatile food and energy prices, rose 3.9% from a year ago, slightly above economists’ forecasts for a 3.8% increase.

But it was enough to send shares of power producers (NYSEARCA:XLU) reeling, dominating the list of the day’s biggest losers on the S&P 500: AES Corp. (AES) -4.5%, WEC Energy (WEC) -4%, Alliant Energy (LNT) -3.5%, Pinnacle West (PNW) -3.4%, Consolidated Edison (ED) -3.2%, PG&E (PCG) -3.2%, CenterPoint Energy (CNP) -3.1%, NiSource (NI) -3%, CMS Energy (CMS) -3%.

The sector losses came even as Treasury yields fell to their lowest levels in weeks, as traders looked past the pickup in inflation and focused on the likelihood of easing price gains going forward.

The yield on the two-year Treasury shed 11 basis points to 4.258%, the lowest level since December 29, the yield on the 10-year Treasury fell 5.5 bps to 3.974%, its lowest since January 3, and the 30-year yield dropped 2 bps to 4.18%.