The utility sector is up 8.8 percent since Dec. 31, the third best-performing sector for the year, following technology and health care. Telecom hasn't been as strong—gaining just 0.8 percent in the same period—but two of that sector's constituents, Windstream Holdings and Frontier Communications, have both gained roughly 40 percent.
Utilities hit a bout of profit-taking after ending the first half of the year in the No. 1 spot. The sector had risen 16.4 percent as of June 30, bolstered in part by the shares' high yields and the appeal of a safer sector at a time when investors were still a bit worried about economic growth.
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Analysts say the attractiveness of high dividend-paying sectors such as utilities is not likely to end soon, especially with valuations still below the benchmark's level. The forward price-to-earnings ratio for S&P utilities is at 14.9, below the S&P 500's p/e of 15.2, Thomson Reuters data showed.
"The U.S. 10-year is an attractive yield given the backdrop of very weak yields around the world. Therefore, that does make the dividend-paying sectors increasingly attractive. That's been the footprint for this market," said Quincy Krosby, market strategist at Prudential Financial, based in Newark, New Jersey.
Overseas turmoil, particularly in Ukraine, has driven up demand for safe-haven bonds, also supported by the Federal Reserve's continued purchase of Treasurys while it gradually pares back its bond-buying program.
The S&P 500 utility sector shot up 2 percent on Friday, its biggest daily percentage gain since June. Earlier this week, the index flirted with correction territory as it lost nearly 10 percent from a high set June 30.