Southern Company (NYSE: SO) got an $8 billion federal loan guarantee leading to a small bounce in the stock.



Chart Courtesy of StockCharts.com



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.

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