Home improvement retailers, oil refiners rise after Harvey
Shares of U.S. home improvement retailers and oil refiners rose on Monday as Tropical Storm Harvey dropped more rain on Houston, Texas, intensifying flooding in the fourth-largest U.S. city.
Harvey, the most powerful hurricane to hit Texas in more than 50 years, made landfall late on Friday and has killed at least two people. It has since hovered around Texas` Gulf Coast, where it is forecast to remain for several more days.
Companies likely to benefit from rebuilding efforts in the region saw their shares advance.
Home Depot climbed 0.9 percent to $151.00, while peer Lowe`s Companies gained 0.5 percent to $73.72. Power generator manufacturer Generac slipped 1.2438 percent to $38.11 after hitting a three-week high of $38.99.
"Home Depot will most certainly see a financial benefit from Hurricane Harvey, just as it did from Hurricane Sandy back in 2013," said Neil Saunders, managing director of GlobalData Retail.
"The impact of Harvey should, however, be even greater both because of the scale of the storm and because since 2013, Home Depot has widened its appeal to the professional segment of the market."REFINERS, INSURERS
U.S. gasoline prices hit two-year highs as massive flooding triggered by the storm forced refineries in the area to close. That sent oil refiners` stocks higher, with Phillips 66 up 0.7 percent to $84.05 and Valero Energy 1.7 percent higher at $68.82.
The S&P 1500 oil and gas refining index jumped 1.94 percent and was poised for its biggest daily percentage gain in nearly 2-1/2 months.
U.S. crude futures fell as refinery shutdowns could reduce demand for American crude.
"Refining is where it is at, because that is where you have pricing power, this just underscores the significance of that pricing power," said Peter Kenny, senior market strategist at Global Markets Advisory Group, in New York.
"It is unfortunate and very unwelcome but an event like this just really drives that home."
Other companies expected to be impacted include those in the insurance sector, auto manufacturers and food retailers.
Shares of insurer Allstate lost 1.30 percent to $90.83 and Dow component Travelers Companies lost 2.71 percent to $123.04 after touching a four-month low of $122.42.
The S&P 500 property and casualty insurance index stumbled 1.82 percent, on track for its worst day since Oct. 20.
Ford Motor shares slipped 0.59 percent to $10.76 and General Motors shed 0.79 percent to $35.32. Analysts said that while the storm could impact the company`s operations and dealers in the short term, damage from flooding could result in a large number of light trucks being replaced.
Food retailers with a footprint in Texas also lost ground. In a note to clients, RBC analyst William Kirk estimated Sprouts Farmers Market, down 7.23 percent, has the largest percentage of its store base in the state. It was followed by Natural Grocers, off 2.10 percent and Kroger (This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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