Wall Street enjoys relief rally as Irma, North Korea fears ease
U.S. stocks rallied broadly on Monday as Irma was downgraded to a tropical storm, easing concerns about its impact on economic growth, and as North Korea refrained from any missile tests over the weekend as feared.
All the 11 major S&P sectors higher, led by gains in technology and financial stocks, with insurers rising as Irma`s fury petered out.
Irma, once ranked as one of the most powerful hurricane recorded in the Atlantic, was downgraded to a tropical storm in the morning, but still caused severe flooding in many Florida cities and knocked out power to about 5.8 million homes and businesses.
But Irma`s weakening meant its impact on economic growth would not be as much as expected. That came as a relief, especially in the wake of Hurricane Harvey, whose devastation is estimated to be $180 billion in property damage and dent third-quarter economic growth.
Geopolitical tensions also eased as North Korea held a massive celebration on it founding day on Saturday, instead of another long-range missile launch as the United States and its allies were bracing for.
"It is a risk back on situation, people are going back into the market," said Neil Massa, senior equity trader at Manulife Asset Management in Boston.
"For now, it is a relief rally for things on both ends - geopolitical and weather wise - as it did not come in too bad."
At 11:01 a.m. ET (1501 GMT), the Dow Jones Industrial Average was up 216.55 points, or 0.99 percent, at 22,014.34 and the S&P 500 was up 20.09 points, or 0.82 percent, at 2,481.52.
The Nasdaq Composite was up 56.85 points, or 0.89 percent, at 6,417.05.
World stocks climbed to a record high, while the dollar edged higher and gold retreated from Friday`s 13-month high.
The CBOE volatility index, a widely followed measure of market anxiety, fell more than 11 percent to 10.80, on track for its biggest decline since Aug. 22.
The technology sector jumped 1.31 percent. Apple rose 1.96 percent a day ahead of the launch of the new iPhone and provided the biggest boost to the Nasdaq and the S&P 500.
The financial sector was up 1.45 percent. Goldman Sachs` 1.8 percent rise led the Dow higher.
Insurers, which had been under pressure after the back-to-back natural disasters, gained. Allstate gained 2 percent while Chubb shares were up about 3.6 percent. Travelers jumped about 3 percent.
Florida insurers gained more. Universal Insurance Holdings and HCI Group surged about 15 percent, while Heritage Insurance soared 20 percent.
Teva jumped 22 percent after the generics drugmaker naming a new chief executive.
Advancing issues outnumbered decliners on the NYSE by 2,216 to 539. On the Nasdaq, 1,966 issues rose and 808 fell.