As I discuss in my column this week, investors (those who are left) just aren't that interested in taking big risks. In this market environment, I can't really say I blame them. Credit downgrades, European bailouts, computer-driven shenanigans on the exchanges, and a multitude of other issues are keeping people on the fence.

The good news is, one of the favorite sectors for defensive investors -- one that has been on the slide since June -- is perking up once more. And that's utility stocks.

As the chart below shows, utility stocks represented by the Utilities Select SPDR ETF (XLU) badly lagged the Standard & Poor's 500 Index ($INX) in August and September as aggressive central bank intervention at home and overseas boosted economic growth expectations and worries about inflation -- both of which tend to be drags on non-cyclical, income-focused areas like utilities. But over the last few weeks, that's all changed and buyers are slowly returning.

What's changed?

Like I've been saying for months, the end of the year was always going to be a difficult one for the markets as major and by nature unpredictable political events transpire. What will Europe do about Spain and Greece? Who will win the U.S. presidential election? What will Congress do about the looming fiscal cliff of tax hikes and spending cuts worth some 5% of GDP? And what of the debt ceiling?

At the same time, the economic data has started to disappoint. August factory orders plunged by the most since the depths of the recession in January 2009. Durable goods orders also fell hard. You can see the disappointment in the drop in Citigroup Economic Surprise Index, shown above, which stocks tend to track.

Given all this, there is good reason for people to be shifting into stocks like these.

I'm recommending my newsletter subscribers take advantage by adding exposure to Entergy Corp. (ETR), a power generator focused on the deep south. Shares offer a 4.8% yield and are breaking up and out of a three-month consolidation pattern. I am also adding shares to my Edge Letter Sample Portfolio.

Check out Anthony's investment advisory service The Edge. A two-week free trial has been extended to MSN Money readers. Click here to sign up. Contact Anthony at anthony@edgeletter.c​​​​om and follow him on Twitter at @EdgeLetter. You can view his current stock picks here. Feel free to comment below.

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