S&P, Dow edge lower as Harvey batters oil market
The Dow and the S&P were slightly lower in early Monday afternoon after oil stocks slipped further as Tropical Storm Harvey bore down on the U.S. energy hub.
Harvey - the most powerful hurricane to strike Texas in more than 50 years when it came ashore on Friday - dumped more rain on Houston on Monday, worsening the flooding that has paralyzed the country`s fourth-largest city.
U.S. crude futures dipped by more than 3 percent to $46.21 per barrel over concerns that the refinery shutdowns could reduce demand for American crude.
The uncertainty pushed investors toward safe-haven assets, with gold rising to its highest in more than a week and U.S. Treasuries holding steady ahead of employment data on Friday.
"What it tells you is a slight risk-off trade. But nothing that is really shaking up the markets," said Matt Lloyd, chief investment strategist at Advisors Asset Management.
Oil majors Exxon and Chevron were down about 0.5 percent. Refiner Valero Energy climbed 1.70 percent.
"We`re looking at this as more of a shorter term phenomenon and the energy stocks have held in relatively well," said Matt Miskin, market strategist at John Hancock Investments.
"The market is not seeing that as a significant move but we`ll have to see how the dynamics play out over the course of the week."
Nine of the 11 major S&P 500 sectors were lower, with the energy sector`s 0.91 percent fall leading the decliners, followed by financial index`s 0.67 percent.
Insurer Travelers fell 2.76 percent, the biggest drag on the Dow, while Allstate dipped 1.37 percent as investors assessed the likely impact of Harvey on the sector.
Flood damage from Harvey may equal that from 2005`s Hurricane Katrina, which resulted in more than $15 billion in flood insurance losses, according to an insurance research group.
JPMorgan`s 0.7 percent decline weighed most on the S&P, while Goldman Sachs was down 1.46 percent.
At 12:39 p.m. ET (1639 GMT), the Dow Jones Industrial Average was down 36.06 points, or 0.17 percent, at 21,777.61 and the S&P 500 was down 2.83 points, or 0.12 percent, at 2,440.22.
However, the Nasdaq Composite was up 10.73 points, or 0.17 percent, at 6,276.38, helped by a rise in Apple and Gilead Sciences.
Home Depot gained 1 percent, while Lowe`s rose 0.71 percent as investors expected the two largest U.S. home improvement chains to be among the biggest beneficiaries of post-Harvey recovery.
Kite Pharmaceuticals surged 28.40 percent after Gilead Sciences agreed to buy the immunotherapy developer in a deal valued at $11.9 billion. Shares of Gilead were up 2.27 percent.
Expedia fell 4.11 percent after an internal memo by the online travel services company said its CEO, Dara Khosrowshahi, has been asked to lead Uber.
Declining issues outnumbered advancers on the NYSE by 1,635 to 1,160. On the Nasdaq, 1,434 issues fell and 1,350 advanced.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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