NEW YORK (CNN/Money) -
Along with the rest of the country, Wall Streeters tuned in to the State of the Union Address Tuesday night, anxious to hear how strong a tack President Bush would take in the brewing conflict with Iraq.
But some traders had a good idea of at least one aspect of Bush's speech ahead of time.
Shares of alternative-energy companies surged in unusually heavy volume Tuesday after Salomon Smith Barney analysts put out a note saying that industry sources had indicated that "themes of reducing dependence on foreign nations for our energy supply and reduced emissions could be addressed by the President Tuesday night."
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Hydrogenics (HYGS: Research, Estimates), a company developing hydrogen-based fuel cells, saw its shares jump 13.1 percent. The stock of Plug Power (PLUG: Research, Estimates), another fuel-cell maker, jumped 33.1 percent. H Power (HPOW: Research, Estimates)'s stock (the H stands for hydrogen) skipped 28.4 percent higher. FuelCell Energy (FCEL: Research, Estimates) lifted 16 percent.
Needless to say, none of these companies make any money.
The president didn't disappoint, proposing $1.2 billion in funding to develop hydrogen-powered cars. "With a new national commitment," said Bush, "our scientists and engineers will overcome obstacles to taking these cars from laboratory to showroom so that the first car driven by a child born today could be powered by hydrogen, and pollution-free."
His boy Elroy
It isn't exactly the first time the fuel-cell stocks have felt the market's love: The issues were hot in 2000, especially as energy prices headed higher. They've fallen since then -- a lot -- with some big zigs and zags on the way.
"They go dormant for long periods of time and then they come back into vogue," said U.S. Bancorp Piper Jaffray manager of Nasdaq trading Tony Cecin. "They are, by their very nature, speculative. A play on the future."
Speculative. A play on the future. For some professionals, the simple translation of that is "dumb."
"It's just stupid," said Jeff Matthews, head of the hedge fund Ram Capital Partners. "When's all this stuff going to happen? What's going to happen between now and then? You invest because you see a trend that's real, because you see a real business."
Indeed, approaching midday on Wednesday it seemed that some of the bloom was already coming off the alternative-energy stocks' rose. After jumping as much as 22 percent at the open, shares of Hydrogenics were up 9.9 percent. Plug Power's 17.6 percent move higher had faded to a 4.7 percent gain. And FuelCell's 8.6 percent opening pop had turned into a 3.6 percent loss.
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