Stocks are mixed as storm affects insurers and energy companies

Associated Press

NEW YORK

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.

With August coming to a close, Monday was one of the quietest days of the year on Wall Street. Biotech drug companies rose after hepatitis C and HIV drug maker Gilead Sciences agreed to buy cancer drug maker Kite Pharma for $11.9 billion. Travel booking website Expedia tumbled as investors expected the company’s CEO, Dara Khosrowshahi, to leave the company to become CEO of ride-sharing company Uber.

Lacking other major corporate or economic news, investors mostly focused on Harvey, which continues to hit parts of the Gulf Coast with historically heavy rains. 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. While gas price spikes will be temporary, other effects of the storm will last for years.

“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 affect interest rates as well, as the Federal Reserve might hesitate to raise interest rates if they think the storm will slow the economy significantly.

Benchmark U.S. crude fell $1.30, or 2.7 percent, to $46.57 a barrel in New York. Brent crude, the international standard, lost 52 cents, or 1 percent, to $51.89 a barrel in London.

Wholesale gasoline futures rose 5 cents, or 2.7 percent, to $1.71 a gallon, and refining companies climbed, as they stand to benefit from higher gas prices. Marathon Petroleum advanced 80 cents, or 1.5 percent, to $52.52.

Insurance companies declined as investors worried that flooding from Harvey will lead to big losses. Travelers slumped $3.24, or 2.6 percent, to $123.23 and Progressive shed $1.09, or 2.3 percent, to $47.31.

Shoe retailer DSW lost $1.01, or 5 percent, to $19.04. Sporting-goods company Finish Line declined 25 cents, or 2.3 percent, to $10.42 and Boot Barn retreated 24 cents, or 2.8 percent, 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 $1.59, or 3.1 percent, to $52.98.