Energy demand around the world is rising, making it an ideal time to address where nuclear power fits into the equation. There are about 70 new plants under construction globally, and there could be more as the world searches for a clean-energy solution. (Will nuclear stocks and ETFs be able to benefit from the talks?)

Hannah Fairfield and Karl Russell for The New York Times report that many companies are concerned that the credit crisis has dealt a critical blow to nuclear power in the United States, which had been perceived as undergoing a renaissance since 2004. (Why nuclear is gaining favor).

There are about 26 plants under construction in the United States right now, but most of the action is coming from overseas. Companies that design reactors, such as General Electric (NYSE: GE), are experiencing rapid growth as Emerging Asia and Europe seek out their business. (Learn more about this sector).

For more stories about nuclear energy, visit our nuclear energy category.

• PowerShares Global Nuclear (NYSEArca: PKN): up 21.3% year-to-date

• Market Vectors Nuclear Energy (NYSEArca: NLR): up 15.8% year-to-date

• iShares S&P Global Nuclear Energy (NYSEArca: NUCL): up 28.3% year-to-date

Is the time right to enlist nuclear energy as a main power source in our efforts to clean our air? Patrick Moore for Austin-Statesman Journal reports that several leaders and groups within the environmental movement now recognize that the nuclear energy industry has a stellar safety record and can meet the nation’s demand for power with virtually emissions-free energy. (Read more about the fight for climate change).

Nuclear energy already produces 72% of all carbon-free electricity in the country. Apparently nuclear has the power to save our climate bill and our cleaner air movement.

The main drawback for nuclear power is that the development process is slow. The benefits are that in addition to being safe, it’s also a relatively cheap power source, says Sarah Harper for Triple Pundit.

For more stories about nuclear energy, visit our nuclear energy category.

• Market Vectors Nuclear Energy (NYSEArca: NLR) up 25.9% year-to-date

• iShares S&P Global Nuclear Energy Index (NYSEArca: NUCL) up 42.1% year-to-date



• PowerShares Global Nuclear (NYSEArca: PKN) up 30.8% year-to-date

Nuclear energy is becoming a clearer alternative energy source, however, the question remains on where to put the hazardous waste from the new proposed nuclear plants. The nuclear movement helps address the carbon dioxide problem contributing to global warming, and will help lessen the use of fossil fuels, reports Daniel Terdimen for CNET News.

The so-called cap-and-trade program proposed by President Barack Obama is not enough to offset carbon emissions, some feel. Although the energy bill is a start, there is no solid data on the legislation’s ultimate economic impact, reports The News & Advance.

The final bill that passed the House 219-212 did make passing reference to nuclear energy, but many claim the bill is sorely lacking a definitive role for nuclear energy. Conservation, wind generation, biomass generation and any other niche source of power simply will not meet the nation’s growing needs, some feel.

• Market Vectors Nuclear Energy (NLR): up 5.6% year-to-date

• PowerShares Global Nuclear Energy (PKN): up 8.8% year-to-date

• iShares S&P Global Nuclear Energy Index (NUCL): up 17.8% year-to-date

For more stories about nuclear energy, visit our alternative energy category.

There are four utility companies that have been selected to receive $18.5 billion in federal financing over the next few years to build the next generation of nuclear reactors. The first steps are set to begin in 2011, and the plants could be online by 2015. Rebecca Smith for The Wall Street Journal reports that UniStar Nuclear Energy, NRG Energy Inc. (NRG), Scana Corp. (SCG) and Southern Co. (SO) are expected to share a set of loan guarantees to be awarded by the Energy Department.

The companies have selected sites for the reactors and are at the forefront the receive licenses to build and operate them. Bear in mind, the government hasn’t formally announced its picks, but energy company officials and reactor vendors have identified the likely winners.

Nuclear power is an Energy Agency  priority, and reduced emissions of carbon dioxide are likely to cut down on greenhouse gas problems. The plants are facing opposition, because of technical, regulatory and profitability issues.

The electrical industry stands to play a role in the development, and the first companies that can build new nuclear reactors will have a big leg up in delivering electricity with low carbon emissions. That could give them a major financial advantage if Congress passes legislation that caps emissions of carbon dioxide.

• Market Vectors Nuclear Energy ETF (NLR): up 14.6% year-to-date

• PowerShares Global Nuclear energy (PKN): up 15% year-to-date

• iShares S&P Global Nuclear Energy Index (NUCL): up 23.2% over three months

• iShares Dow Jones U.S. Utilities (IDU): down 1.9% year to-date; SO is 6.1%

For more stories on nuclear energy, visit our nuclear category.

Safety and disposal issues aside, the high cost of building a nuclear reactor is what is at the forefront of the news. Mark Williams for the Associated Press reports that the shift away from fossil fuels will be met with the building of more nuclear reactors. Cost is going to be a factor at every stage of the building process. For example, this month in Missouri, the first of the next generation reactors was put on hold because of the $6 billion price tag.

Already, some states have altered laws so that consumers are actually paying for the bill of the cost to build a reactor to avoid problems such as the Missouri incident. The cost of labor, raw materials and technology have all grown exorbitantly. Because much of the new technology and building techniques are untested in the United States, construction will be lengthier, more expensive and riskier, according to a report issued by Standard & Poor’s.

So far, residential electricity rates have risen 1%-3% annually for AmerenUE customers, with an increase of up to 40% total. For now, low-prices and clean, carbon-free energy do not go together. Despite legislation, many consumers will see the construction costs on their energy bills.

The cost of reactors is just one of the issues the nuclear energy industry is faced with. Although interest has definitely increased, nuclear energy also has a reputation that precedes it.

• Market Vectors Nuclear Energy ETF (NLR): up 7.5% year-to-date

• PowerShares Global Nuclear Energy (PKN): up 2.6% year-to-date

Most alternative energy-focused ETFs are down 50% or more, as the switch to alternative energy has taken a backseat thanks to falling crude oil prices. As oil prices topped $147 a barrel last summer and gas closed in on $5 a gallon, alternative energy saw renewed interest from consumers. Unfortunately, now the sector has a taken a back seat since fuel prices are no longer sky-high.

The Obama administration has made it clear that it aims to reduce our dependence on foreign oil, so once the government takes action on the $15 billion earmark for alternative energy as outlined in the stimulus package, these investments will be the focus, reports Harry Dumash’s Winning Investing.

• PowerShares WilderHill Clean Energy (PBW): This is best for an all-around approach to the altenrative energy sector, and tracks 51 small-mid size companies involved in the business.

• Market Vectors Solar Industry (KWT): Solar stocks may have the best chance to gain, as advancements within the solar industry are the most rapid.

• First Trust ISE Global Wind Energy Fund (FAN): Wind-powered generating equipment is still in its infancy, but this energy srouce has potential and the power to help energy needs.

This is the first time in 76 years that an election is taking place during a financial meltdown/crisis. Ben Steverman for BusinessWeek reports that based on recent polls, the coincidence seems to have boosted the chances that Illinois Sen. Barack Obama, the Democratic nominee, will defeat Republican Arizona Senator John McCain on Nov. 4.

The biggest myth concerning the stock market and the election is that the market is waiting to see who wins the election. If the polls are to be believed, there is little doubt who will win at this point in time and stock traders are used to weighing probabilities, looking at data, and making investing bets based upon them.

For example, a win for Sen. Obama would send alternative energy ETFs and stocks higher, while health care would suffer based on the notion that Obama would crack down more on high malpractice insurance costs and their effect on the overall health care industry, reports Paul R. LaMonica for CNN Money.com.

An ETF that could be impacted is Van Eck Market Vectors Global Alternative Energy (GEX).

A win for McCain, the Republican party candidate, would send aerospace and defense stocks and ETFs into the air, but coal and ethanol would wither. Nuclear energy would also benefit under McCain’s presidency.

PowerShares Global Nuclear Energy Portfolio (PKN) could be impacted in a McCain win.

As the financial headlines remind us daily, the next president will have to answer two important questions: How much will his proposals cost, and where will we get the money? This is especially true in regards to America’s aging infrastructure, which is deemed the “$1.6 Trillion Question.”

Over the next five years, we could potentially need $1.5 trillion to expand and modernize America’s infrastructure problems. Harold L. Sirkin for BusinessWeek says that infrastructure expenditures we make today are intended to work for us for the next 30 to 100 years. Investing in infrastructure creates value for the economy, which increases our competitiveness.

• iShares S&P Global Infrastructure Fund (IGF)

• Market Vectors Steel (SLX)

One simple question with no simple answer has centered around the small-business owners of the world – the “Joe the Plumbers,” if you will. First, the definition of small business varies, with a two-person enterprise qualifying, as well as a construction company with $33.5 million or less in sales, according to the Small Business Administration.

Sen. Obama’s plan would raise the marginal tax rate on incomes above $250,000 a year to 36% and 39.6%, from the current 33% and 35%, effectively returning top tax rates to their levels during the 1990s. Sen. McCain has proposed reducing corporate tax rates from 35% to 25%, but that would only potentially affect about a quarter of small-business owners, reports Amy Schatz for The Wall Street Journal.

Sen. Obama would raise capital gains tax rates for families earning more than $250,000 to 20% from 15%. But the Obama plan would eliminate capital gains taxes for investors and entrepreneurs in small firms. Neither candidate is concrete on definitions or restrictions and benefits when it comes to this topic.

How are both candidates going to preserve our technological innovation as well as expand on it? Their visions are polar opposites and the gap is widening at $60 billion. McCain’s deal seeks to encourage innovation by cutting corporate taxes and ending what he calls “burdensome regulations” that he says inhibit corporate investment.

Sen. Obama feels that the United States must compete far more effectively against an array of international rivals who are growing more technically adept. Obama looks to the federal government to finance science, math and engineering education and the kind of basic research that can produce valuable industrial spinoffs, report William J. Broad and Cornelia Dean for The New York Times.

• Technology Select Sector SPDR (XLK)

Jackie Calms for The Wall Street Journal reports that there are two anecdotes for the economic crisis. McCain claims he will help create more jobs in America, present tax cuts to create more jobs and help protect life savings. Obama claims he will create five million new high-wage jobs simply by investing in alternative energy, and create two million more jobs by rebuilding infrastructure, starting with roads and schools.

Emily Brandon for US News & World Report reports that the “icing” on the economic packages proposed include Obama’s 90-day moratorium on foreclosures from banks that receive capital from the Federal government. McCain presents a $300 billion plan for government to purchase unaffordable mortgages from troubled borrowers and exchange them for less-expensive fixed-rate loans backed by the Federal Housing Administration.

• SPDR Homebuilders (XHB)

If Sen. McCain or Sen. Obama lives up to even part of his agenda, it will make a difference not only to your tax bill next year but also to your family’s long-term financial security, reports Pat Regnier for CNN Money.

Whether you’re talking about financial market regulation, income taxes, retirement savings or paying for health care coverage, Obama is much more likely to have the federal government intervene in the name of “American families”. McCain, on the other hand, puts more faith in the marketplace and both individual and corporate enterprise.

• iShares Dow Jones US Financial Sector Index Fund (IYF)

Despite the worsening economic picture, though, neither candidate has signaled any intention to scale back his plans. And the head of the Senate Finance Committee, which would have a big say in just about everything the next president hopes to accomplish on health care, says he won’t let the current financial crisis stop the committee from tackling it. Both McCain and Obama have big-ticket ideas about health care reform and how to obtain it, reports Kevin Freking for Associated Press.

While both Obama and McCain propose overall cuts, is there any specifics that are guaranteed? Some analysts suggest that investing in muni-bond ETFs is an attractive option, as big federal budget deficits are looming and expected to grow, reports The Wall Street Journal.

• PowerShares Insured National Municipal Bond Portfolio (PZA)

In reference to McCain’s housing proposal, experts are skeptical, as the toxic loans have been sliced and diced so much they are hard to re-package. Julie Hirschfiled Davis for Associated Press says even if the government did gain access to the mortgages, it would have to pay far more than they would ever be worth, housing specialists said Wednesday.

As the election day nears, both candidates have done their best to put out proposals that address the specific economic problems that appear most dire to them.

Prospects for Britain’s nuclear energy industry appear favorable, especially to the French, who believe that this power source can prosper even during a wave of eco-consciousness. The deal has both countries standing behind it, and British Energy’s eight nuclear plants would be given to the French government, reports Greg Keller for Associated Press.

If the deal closes, EdF will plan on opening four more plants in Britain. EdF is already the world’s largest nuclear plant operator, with 58 reactors in France, and the country get 80% of its energy from nuclear power. The takeover would bring more French nuclear knowledge to Britain, which is already searching for ways to diversify its energy sources.

ETFs that are related:

• Market Vectors Nuclear Energy (NLR): down 31.4% year-to-date; EdF is 7.7%; British Energy is 8.1%.
• PowerShares Global Nuclear Energy (PKN): down 19.5% since April 4 inception; EdF holds 2.9% of assets

At the time, Richard Kang for Seeking Alpha wrote an article about the price increases last year, ways to get diversified exposure to uranium was through stocks for companies such as Unranium Participation Corp (U) and Cameco (CCJ).

Fast-forward one year, and investors have now got three ways to access the market for nuclear energy: the Market Vectors Nuclear Energy (NLR), Barclays iShares Global Nuclear Energy (NUCL) and PowerShares Global Nuclear Energy (PKN).

Evidence is pointing to emerging markets as the particular market for future growth for nuclear energy, where the stigma and reputation toward nuclear energy is not as great as it is here in the United States. The need for nuclear energy in the developing countries is obvious when you consider the competition for oil within the United States and China. They are in need for alternative energy choices the most.

Kang’s major question is now, do you invest in uranium prices, or uranium producers? He suggests going into nuclear energy as an alternative energy or emerging markets play. Uranium producer space is limited to a few heavies and then to many microcaps and the holding list for the ETFs doesn’t give enough information, so there is some research involved if you are interested in uranium as a commodity.

While there’s no uranium futures ETF, futures are traded on the New York Mercantile Exchange (NYMEX). There are no uranium futures ETFs currently in registration, so if this is an area you’re interested in targeting, you might have to wait awhile.

This illustrates one of the many advantages of ETFs: they simplify what would otherwise be very complex transactions.

For now, the ETF options are restricted to the area of companies that deal with nuclear energy.

• NLR has an expense ratio of 0.65% and is 31% allocated in companies involved with nuclear generation. Japan is 29.9% of assets, followed by Canada at 19.7% and the United States at 17.9%.
• NUCL has an expense ratio of 0.48% and is allocated 54.7% in utilities and 24.7% in energy. The United States is the top country in the fund, with 30.7% of assets, France is 15.7% and Canada is 15.4%.
• PKN has a 0.75% expense ratio. It’s 44.7% allocated in industrials and 24.9% in utilities. The top country holdings are the United States (34.8%), Japan (24.9%) and Canada (11.9%).