Teco Energy leads utility gains in 2Q

Teco Energy Inc., which has electric utility, natural gas distribution and coal production businesses, surged 31 percent to close Friday at $21.45. For the three-month period ending June 27, the overall sector gained about 5 percent.

Baird analyst David E. Parker predicted earlier this month that soaring coal prices in 2009 and 2010 should boost the company's margins, although its profit was hurt this year by hedges in the coal unit.

Parker noted that most of the company's coal production for the next two years is unhedged, leaving it ripe to take advantage of prices that are expected to leap further on booming international demand.

Elsewhere in the utility sector, Pinnacle West Capital Corp. posted the biggest decline over the last three months. Its stock slipped about 12 percent in the quarter.

Excelon Corp., the largest U.S. utility by revenue, rose 7 percent during the quarter to finish Friday at $89.05.

Out of the 31 utility stocks in the S&P 500, 21 posted gains in the quarter and 10 stocks declined.

So far this year, the stocks have lost about 7 percent.