While you were sleeping: Wall St weighs hurricane Harvey impact

Tuesday 29th August 2017

Wall Street was mixed as shares of insurance and oil companies including Travelers fell while those of home improvement chains including Home Depot gained as investors tried to assess the catastrophic impact of hurricane Harvey on the Texas economy.

In 3.16pm trading in New York, the Dow Jones Industrial Average fell 0.13 percent. However, the Nasdaq Composite Index rose 0.16 percent. In 3.02pm trading, the Standard & Poor’s 500 Index drift 0.01 percent lower.

Wall Street's fear gauge—the CBOE Volatility Index or the VIX—rose 2.3 percent to 11.54.

"The economic impact of Hurricane Harvey is still very hard to determine,” Matt Maley, an equity analyst at Miller Tabak & Co wrote in a note to clients Monday, Bloomberg reported. “It’s going to be a while before we know how much of an impact it will have. The ‘clean-up’ and ‘rebuild’ after these disasters actually have a positive impact on the economy in certain ways.”

US crude oil futures dropped while gasoline prices climbed as Harvey devastated Houston and battered the Gulf Coast.

“The reduced inputs to those Gulf refineries will result in an increase in crude inventories,“ Tony Headrick, energy market analyst at CHS Hedging, told Reuters. ”That outweighs the outages in crude oil production from the storm.”

The Dow moved lower as declines in shares of Travelers and those of Goldman Sachs, down 2.8 percent and 1.4 percent respectively, outweighed gains in shares of Home Depot and those of Apple, up 1.3 percent and 1 percent respectively recently.

Shares of Amazon traded higher, up 0.1 percent as of 3.22pm, as the new owner of Whole Foods Market slashed the grocery chain's prices on popular items like avocados and apples by a third, according to Reuters, while prices on some items were cut as much as 43 percent, according to Bloomberg.

The new Whole Foods prices, in some cases, were lower than those at a nearby Ralphs, a grocery store owned by Kroger which has a reputation for competing aggressively on price, Reuters reported.

Shares of Expedia dropped, trading 4.4 percent weaker as of 3.26pm in New York, after reports that its CEO Dara Khosrowshahi will be leaving the company to run Uber Technologies.

“It’s definitely a loss for Expedia,” Douglas Quinby, of the research firm Phocuswright, told Bloomberg. “Dara’s a rock star; the Expedia story over the past decade is an extraordinary one. However, he’s also built a pretty deep bench.”

Quinby said CFO Mark Okerstrom is a likely candidate to replace him.

Tyson Foods, the largest US poultry producer, said US securities regulators concluded an investigation into the company's alleged collusion on poultry prices.

Tyson Foods said it received a letter dated August 22, 2017 from the Securities and Exchange Commission about the previously disclosed investigation of the company.

“The letter stated that the SEC staff has concluded its investigation and that, based on the information it has as of that date, it does not intend to recommend an enforcement action by the SEC against Tyson,” the company said in a statement.

The stock traded 1.3 percent weaker at US$62.41 as of 2.24pm in New York.

In Europe, the Stoxx 600 Index finished the session with a 0.5 percent drop from the previous close. The UK’s FTSE 100 Index fell 0.1 percent, Germany’s DAX Index declined 0.4 percent, while France’s CAC 40 Index slid 0.5 percent.

(BusinessDesk)

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