ELECTRICITY STOCKS LIGHTEN UP THE MARKET

If you look for a spark of life in the stock market these days, the search pretty much begins and ends with electric utility issues.

While the Dow Jones average of 30 industrials was climbing to record highs near the 3,000 mark earlier this year, the electric utility group languished in disfavor.But since late summer, as fears of recession gripped the markets, the roles have been reversed. From its low point for the year on Aug. 24 through Nov. 2, Dow Jones's average of 15 utilities climbed more than 13 percent.

Among the 15 common stocks listed on the New York Stock Exchange that made new 52-week highs in the week ended Nov. 2, nine were shares of electric companies - from DQE Inc. in Pittsburgh to Houston Industries in Texas, from Dominion Resources on the East Coast to Pacific Gas & Electric in California.

As often happens in periods of market euphoria, investors shunned the group in the spring and early summer while they looked for racier ways to benefit from rising stock prices.

Now, analysts say, money is flowing back the other way looking for a high-yielding haven from the perils of a bear market.

"Investing in the electric utilities in a climate of economic weakness presents something close to a win-win situation," maintains Barry Abramson, an analyst at Prudential-Bache Securities, in a recent report spotlighting the group.

"Electric utilities would be strong in a sideways market. If the economy continues to stagnate and the stock and bond markets show no clear direction, the electric utilities should outperform thanks to their superior and very safe yields.

"On the other hand, if a recession continues to threaten and the Federal Reserve eases dramatically, falling interest rates would also provide a catalyst for the group.

"In fact, just about the only scenario that would be negative for the electric utilities would be a rapidly strengthening economy and a renewed bull market - a very unlikely outcome, at least in the near term."

The current level of utility dividends - the stocks yielded about 6.7 percent, on average, as of early this month - is an attraction by itself.

Beyond that, analysts say, utility profits and payouts aren't much affected by the ups and downs of the business cycle, and can even keep growing gradually in periods of recession.