Wall Street closes little changed as Harvey pummels Texas

Updated: Tue, Aug 29, 2017
02:09 am
Reuters
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The S&P 500 and Dow ended little changed on Monday, with energy and bank shares lower as Tropical Storm Harvey crippled the U.S. energy hub in Texas, while tech and healthcare gave a light boost to the Nasdaq.

Harvey, the most powerful hurricane to strike the southern U.S. state in more than 50 years when it came ashore on Friday, dumped more rain on Houston on Monday, and the flooding could worsen as engineers release water from overflowing reservoirs to keep it from jumping dams and surging uncontrollably.

Market analysts said despite the human drama and infrastructure devastation, the market could take solace in the fact that a massive rebuilding effort would mostly offset the negative economic consequences of the flooding.

U.S. crude futures fell 2.5 percent to $46.68 per barrel over concerns that the refinery shutdowns could trigger an increase in crude inventories. Gasoline prices , however, rose.

Oil majors Exxon and Chevron were down 0.3 percent and 0.4 percent respectively. Refiner Valero Energy climbed 1.1 percent.

Investors sought safe-haven assets, with gold rising to its highest in nearly 10 months.

But the search for safe havens was accompanied by stock picking in Home Depot , which rose 1.2 percent, and other companies likely to benefit from rebuilding efforts in the region.

"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.

Insurer Travelers
was the largest drag on the Dow with a 2.6 percent drop to $123.23, while Allstate fell 1.5 percent to $90.65 as investors assessed the likely impact of Harvey on the sector.

The S&P 500 financial sector <.spsy> was the largest weight on the index, with a 0.5 percent drop.

"There tends to be initially a knee-jerk reaction and people react to the human side and the energy disruption, but that eases soon," said Jim Paulsen, chief investment strategist at The Leuthold Group in Minneapolis, of the market`s reaction to the major storm and its aftermath.

"This is a massive human tragedy and the worst of it may not be over yet, but as far as stock market impact I don’t know if it is net-net a huge negative considering the fact it will bring in huge stimulus to the region."

The Dow Jones Industrial Average <.dji> fell 5.27 points, or 0.02 percent, to close at 21,808.4, the S&P 500 <.spx> gained 1.19 points, or 0.05 percent, to 2,444.24

The Nasdaq Composite <.ixic> added 17.37 points, or 0.28 percent, to 6,283.02 helped by rises in Apple and Gilead Sciences .

Kite Pharmaceuticals surged 28.0 percent to $178.05 after Gilead Sciences agreed to buy the immunotherapy developer in a deal valued at $11.9 billion. Shares of Gilead rose 1.2 percent.

Expedia fell 4.5 percent after an internal memo by the online travel services company said its CEO, Dara Khosrowshahi, has been asked to lead Uber [UBER.UL].

Declining issues outnumbered advancing ones on the NYSE by a 1.14-to-1 ratio; on Nasdaq, a 1.02-to-1 ratio favoured decliners.

About 5.13 billion shares changed hands in U.S. exchanges, compared with the near 6 billion daily average over the last 20 sessions.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)

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