Renewable energy stocks soar on energy bill hopes

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NEW YORK (Reuters) - The shares of renewable energy companies rose on Tuesday in anticipation of Congress approving an energy bill that environmentalists have hailed for tough action on automobile fuel efficiency.

In afternoon trading on the New York Stock Exchange, shares in LDK Solar Co Ltd <LDK.N>, which manufactures solar wafers, were up over 18 percent at $38.35 and Trina Solar Ltd <TSL.N> gained 5.26 percent to $47.65.

NEW YORK (Reuters) - The shares of renewable energy companies rose on Tuesday in anticipation of Congress approving an energy bill that environmentalists have hailed for tough action on automobile fuel efficiency.

In afternoon trading on the New York Stock Exchange, shares in LDK Solar Co Ltd <LDK.N>, which manufactures solar wafers, were up over 18 percent at $38.35 and Trina Solar Ltd <TSL.N> gained 5.26 percent to $47.65.

On Nasdaq, Solarfun Power Holdings Co Ltd <SOLF.O> was up nearly 25 percent at $25.70, China Sunergy Co Ltd <CSUN.O> rose 10.3 percent to $10.21 and Canadian Solar Inc <CSIQ.O> was 5.35 percent higher at $17.11.

During the first half of the options trading session, 17,000 calls compared with 4,467 puts changed hands in LDK, above its average volume of 17,000 contracts, according to market research firm Trade Alert.

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"The House of Representatives is expected to vote on an energy bill within the next two days. An energy bill before Congress is expected to move quickly," said William Lefkowitz, options strategist at brokerage firm vFinance Investments in New York.

"The main issue is alternative energy. If approved this is perceived as a positive for LDK and other stocks in the sector," he said. "LDK calls, conveying the right to buy the stock as high as $80 per share, are active this morning."

The House is expected to vote on an energy bill this week after Speaker Nancy Pelosi struck a deal with Michigan Rep. John Dingell, a long-time champion of Detroit automakers such as General Motors Corp <GM.N> and Ford Motor Co <F.N>, to raise fuel-economy standards to 35 miles per gallon by 2020.

Environmental groups have hailed the deal as historic, because it would be the first time Congress has taken significant action on fuel efficiency since the 1980s. But it is still uncertain whether production tax credits for solar, wind and other alternative energy sources will be in the bill.

Pete Najarian, co-founder of Web information site optionmonster.com in Chicago said: "What we are seeing are more and more companies such as Solarfun reacting to solar as a renewable energy. The call speculation has been building in many of the names."

Solarfun said on Tuesday that Good Energies, an investor in the renewable energy and energy efficiency industry, agreed to purchase about 66.7 million ordinary shares and 281,011 American Depository Shares from current shareholders. The investment would raise Good Energies' stake in the company to about 34.7 percent from 6.3 percent.

(Reporting by Steve James, Doris Frankel in Chicago and Chris Baltimore in Washington; Editing by Jeffrey Benkoe and Andre Grenon)