Nuke Stocks Fall on Unexpected Factor—Germany
CNBC "On-Air Stocks" Editor
Nuclear stocks, which saw a brief rally a week and a half ago as it appeared that Japan's nuclear crisis might be manageable, have been sinking for several days again. Cameco , USEC , Uranium Energy , Uranerz , and Denison Mines all down 4 to 8 percent today.
But there's another reason for the weakness in nuclear stocks, one much more ominous: German Chancellor Angela Merkel's party lost state elections in Baden-Wuerttemberg, which they had been governing in an alliance with the Free Democrats.
But this time the Green Party, formerly a marginal force, won nearly a quarter of the votes. The new coalition will likely be strongly anti-nuclear. Since Germany gets nearly a quarter of its energy from nuclear, this is not a good sign for the nuclear industry. The Christian Democrats have held power for in Baden-Wuerttemberg for 58 years — their loss there is not a good sign for other elections.
Of course, this means uranium prices have been dropping like a rock. RBC recently dropped its spot price forecast for 2011 to $69 a pound from $80 a pound, and their 2012 forecast to $77.50 a pound from $100.
So who's the winner? Well, duh: Green Party? Solar stocks are all up 2 to 6 percent.
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