Can Obama’s Nuclear Snowball Lift the Uranium Sector?

President Obama announced $8.3 billion in loans guaranteed for nuclear reactors yesterday, and according to USA Today, he wants spending to snowball through 2011.

After touting nuclear energy during his State of the Union Address in January, Obama pledged billions in Department of Energy loan guarantees to finance new reactors on Tuesday. According to coverage by USA Today, the D.O.E. has $18 billion available, and Obama is hoping funds will snowball to $54.5 billion in 2011 – enough to build ten reactors. The $8.5 billion in guarantees Obama announced yesterday are headed to Georgia, where two reactors could supply 1.4 million people with electricity as soon as 2017.

Components of the Uranium Stocks Index soared higher yesterday, leaving more than half of the sector ahead by double-digits over the last five sessions.

Uranium Resources (URRE) is up by more than 20% for the period, followed by Uranerz Energy (URZ) and Uranium Energy (UEC), which have added 17% and 15% respectively.

USEC (USU), which got crushed last summer when the D.O.E. denied a loan guarantee that Obama had promised to support while on the campaign trail, is the sector’s biggest winner over the last month. Meanwhile, Ur-Energy (URG), Paladin Resources (OTC: PALAF), and Cameco (CCJ) were all off by -8% or more for the period as of Tuesday’s close.

As of this writing, the Uranium Stocks Index is one of the top-five performing tickerspy Indexes over the last week, up by 10.6%. It will be interesting to see whether optimism for growth in the American nuclear sector can help power these stocks higher throughout 2010.

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Tags: CCJ, PALAF, UEC, URG, URRE, URZ, USU