Stocks end nearly flat as storm rages
U.S. stocks finished little changed Monday as investors focused on the effects of Tropical Storm Harvey. Insurance companies and oil drillers stumbled while refineries rose along with gasoline prices.
Monday was one of Wall Street’s quietest days of the year. Biotech drug companies rose after Gilead Sciences agreed to buy Kite Pharma. Travel booking website Expedia tumbled as investors expected its chief executive to leave for ridehailing company Uber.
Lacking other major corporate or economic news, investors mostly focused on Tropical Storm Harvey, which continued to hit parts of the Gulf Coast. Large parts of the energy and petrochemical industries are based there, and companies with a lot of stores in the area stand to lose business.
“There will be ripple effects that everyone is going to feel,” said Jack Ablin, chief investment officer for BMO Capital Markets. He said that could include higher insurance premiums, as the storm is likely to cause tens of billions of dollars in flood damage. Ablin added that the storm might also affect interest rates, as the Federal Reserve might hesitate to raise rates if officials think the storm will slow the economy significantly.
The tropical storm, which made landfall in Texas on Friday when it was still a hurricane, is expected to continue for days, and it has shut down much of Texas’ oil and gas industry.
Shares of Helmerich & Payne, an oil and gas well drilling contractor, fell 2.9% to $43.49.
Wholesale gasoline futures climbed 5 cents, or 2.7%, to $1.71 a gallon, and refining companies climbed, as they stand to benefit from higher gasoline prices.
Benchmark U.S. crude fell 2.7% to $46.57 a barrel. Brent crude, the international standard, fell 1% to $51.89 a barrel. Heating oil rose 1 cent to $1.64 a gallon. Natural gas rose 3 cents to $2.93 per 1,000 cubic feet.
Insurance companies declined as investors worried that flooding from Harvey will lead to big losses. Travelers fell 2.6% to $123.23.
Shoe retailer DSW slid 5% to $19.04. Sporting goods company Finish Line fell 2.3% to $10.42. Boot Barn retreated 2.8% to $8.33. Citi Investment Research analyst Kate McShane noted that all three companies have large numbers of stores in Texas.
Some companies that may play a role in cleanup efforts after the storm traded higher. Those included environmental services company Clean Harbors, which rose 3.1% to $52.98.
Gold rose $17.40 to $1,315.30 an ounce, its highest price in 11 months. Silver rose 39 cents to $17.44 an ounce. Copper ticked up 3 cents to $3.06 a pound.
The euro rose to $1.1979 from $1.1888, bringing it to its highest level since early 2015. The dollar inched down to 109.09 yen from 109.24 yen.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.16% from 2.17%.