Energy, bank shares weigh on Wall Street as Harvey pummels Texas

NEW YORK - 28 August 2017: Energy and bank shares weighed on the Dow and the S&P 500 on Monday as Tropical Storm Harvey crippled the U.S. energy hub in Texas.

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.

U.S. crude futures CLc1 fell 2.3 percent to $46.75 per barrel over concerns that the refinery shutdowns could trigger an increase in crude inventories. Gasoline prices RBc1, however, rose.

Oil majors Exxon (XOM.N) and Chevron (CVX.N) were down 0.5 percent and 0.7 percent respectively. Refiner Valero Energy (VLO.N) climbed 1.3 percent.

The uncertainty pushed investors toward safe-haven assets, with gold XAU= rising to its highest in nearly 10 months.But the search for safe havens was accompanied by stock picking in Home Depot (HD.N), which rose 1.1 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 (TRV.N) was the largest drag on the Dow with a 2.6 percent drop to $123.21, while Allstate (ALL.N) fell 1.5 percent to $90.60 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 0.6 percent drop.

The Dow Jones Industrial Average .DJI fell 19.62 points, or 0.09 percent, to 21,794.05, the S&P 500 .SPX lost 0.41 point, or 0.02 percent, to 2,442.64

The Nasdaq Composite .IXIC added 16.06 points, or 0.26 percent, to 6,281.70 helped by rises in Apple (AAPL.O) and Gilead Sciences (GILD.O).

Kite Pharmaceuticals (KITE.O) surged 28.1 percent to $178.25 after Gilead Sciences agreed to buy the immunotherapy developer in a deal valued at $11.9 billion. Shares of Gilead were up 1.3 percent.

Expedia (EXPE.O) fell 4.4 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 1.21-to-1 ratio; on Nasdaq, a 1.13-to-1 ratio favored advancers.

The S&P 500 posted 49 new 52-week highs and 10 new lows; the Nasdaq Composite recorded 98 new highs and 85 new lows.