Utilities deliver the essential lifeblood of U.S. industry and daily living — electricity and natural gas. In decades past, utility stocks were considered a special segment of the market because state regulators controlled the prices that could be charged. Beginning in the 1990s, utilities have been significantly "deregulated," spurring both increased competition and large mergers that obliterate old regional identities. The Dow Jones Utility Average is the youngest of the three Dow Jones Averages, having made its debut in January 1929. According to analysts who study the averages, a rise in utility stock prices indicates investors anticipate falling interest rates. That's because utilities are big borrowers and their profits are enhanced by lower interest costs. Conversely, the utility average tends to decline when investors expect rising interest rates. Because of this interest-rate sensitivity, the utility average is regarded by some as a leading indicator for the stock market as a whole.

Unlike the industrial average, which has undergone more than 100 changes in its nearly 104 years, the utility average has remained largely unaltered. Most of the changes in recent years have been the result of mergers and acquisitions.

Originally, the utility average started with 18 stocks, and six months later, on July 1, 1929, the number was increased to 20. The average was reduced to 15 stocks on June 2, 1938, and has remained at that level ever since.

For trivia buffs, the original utility average included American Telephone & Telegraph Co., which was removed in 1938 and added to the Dow Jones Industrial Average in March 1939, supplanting International Business Machines Corp. AT&T was dropped from the Industrial Average in April, 2004, but now is back in because the former SBC Communications bought the company and subsequently changed its name to AT&T.

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