This week, the Dow Jones Utility Index rose 0.13 points to 449.96—posting a nominal 0.03% gain—in contrast to the Dow Jones Industrial Average which climbed to a new closing high of 12,342.56. The 0.13 weekly gain is hard to get excited about, yet it is worthy to note that the Utility Index is approaching 452.65—a mere 2.69 points away from its 12-month high. A 0.59% increase in the Utility Index would push it to a new 12-month high, but in an industry “coasting” on the lack of fundamental momentum, investors would have to look toward lower interest rates to trigger gains from this point—and the interest rate environment seems to be cooperating, with the 30-year Treasury yielding 4.69% at the Friday close, unchanged from the previous week’s close.

Even the Dow Jones Transportation Average closed at 4,847.72—moving towards its 5,013.67 high reached this past May. Many market watchers are looking for the Transportation Index to surpass the 5,000 benchmark, thereby confirming a bull market for stocks. While some of these correlations are questionable to us, many are long-standing and, if “the markets” gives credence to them, the net result is to at least boost investor confidence: Does much more matter in the short run?

Utilities seem to have used this week to continue a pattern of early debt redemptions and even some Indenture modifications—taking full advantage of the current lower “cost of money” environment and modest external capital requirements. With concerns over rising interest rates less pressing than several months ago, debt rebalancing / refinancing is a trend likely to continue in earnest.

While the Indexes can’t keep going up indefinitely, there appears to be nothing on the horizon to destabilize the current tranquil market sentiment—accordingly, it is easier to be bullish rather than bearish right now and perhaps even nearing the 2008 Presidential elections—when election uncertainty might trigger a defensive posture and stocks slide on little-to-no meaningful fundamental data.