The March 11 earthquake in Japan, and the devastating tsunamis which followed, critically damaged the nuclear power plant in Fukushima, 150 miles north of Tokyo, raising the threat of a meltdown. After radiation levels at the plant grew dangerously high on Wednesday, workers were temporarily evacuated.
Shares in the companies like GE heavily involved in the design and construction of the power plant fell sharply as soon as news of the damage and radiation leaks broke. As the debate turned to the safety of nuclear power plants in the U.S., analysts, expecting construction delays at new plants, cut expectations for shares of companies that build and run American power plants, along with companies that mine the nuclear fuel uranium.
GE saw the worst drop of all 30 companies in the Dow Jones industrial average, according to Bloomberg, with shares falling 3.7 percent to $19.61 between March 11 and March 15. Shares of Japanese firm Hitachi, which runs the stricken plant along with GE, fell 6.3 percent in trading on Monday, before recovering.
GE's nuclear power arm, represents a small fraction of the firm's income, making up around $1 billion of GE's $150 billion in revenue in 2010, Bloomberg reported. The firm also has no legal liability for the crisis in Japan.
Toshiba, which was responsible for building another of the nuclear reactors at the Fukushima Daiichi plant, also fell 10 percent on Monday, Marketwatch reported.
U.S. firms more involved in the nuclear power industry, are likely to take a harder hit as the crisis plays out, Marketwatch reported, with questions over the safety of nuclear power. Shares at energy firm Entergy, which runs 12 U.S. nuclear power plants, fell 2 percent on Tuesday, Businessweek reported.
Citing concerns about the safety of American nuclear power plants, especially in earthquake-prone parts of the country, as well as possible delays to new construction and possible higher costs, Steve Fleishman, analyst at Bank Of America Merrill Lynch cut ratings for Entergy and Scama Corp, which is planning to build two nuclear reactors in South Carolina, according to the Wall Street Journal.
Companies which mine uranium, an element used to power nuclear power plants, are also expected to suffer, while renewable energy stocks trade higher the WSJ reported.