Insurance companies among day's biggest gainers
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U.S. stocks rose on Monday, with major indexes on track for their strongest session since August as Hurricane Irma hit Florida with less force than expected and North Korea failed to conduct another nuclear missile test over the weekend, reviving investor appetite for riskier assets such as equities.
The Dow Jones Industrial Average rose 164 points, or 0.8%, to 21,965, its biggest one-day percentage rise since Aug. 22. The S&P 500 added 15 points to 2,477, a gain of 0.6%. The Nasdaq Composite Index climbed 50 points, or 0.8%, to 6,411. At current levels, major indexes are less than 1 percentage point from all-time highs.
U.S. stocks booked losses last week (http://www.marketwatch.com/story/wall-street-stocks-set-for-losses-as-life-threatening-irma-aims-for-florida-2017-09-08) as investors fretted that Hurricane Irma, which made landfall in the Florida Keys on Sunday, would cause massive devastation.
Irma was downgraded to a Category 1 storm early Monday after tearing a destructive path across South Florida on Sunday. The hurricane, due to be downgraded to a tropical storm, is expected to hit Tampa and Orlando early Monday and Tallahassee later in the afternoon. Irma has left at least 4 million residents without power.
"The big news this morning has been that Hurricane Irma, while devastating, has not been as catastrophic as had been feared," said Colin Cieszynski, chief market strategist at CMC Markets. "Millions of homes lost power but not as many as had been widely thought and while damages are likely to run into the billions, they are not likely to run anywhere near the more extreme pre-storm estimates."
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The day's gains were broad, with 10 of the 11 primary S&P 500 sectors higher on the day. Financials were by far the biggest gainer, up 1.4%. Insurance companies led that sector's gains, boosted by the lighter-than-expected damage from Irma. Travelers Companies Inc.(TRV) climbed 5.1% and was one of the biggest boosts to the Dow, while Progressive Corp (PGR) was up 4.2%. American International Group Inc.(AIG) rose 1.2%.
The PowerShares KBW Property & Casualty Insurance Portfolio (KBWP) spiked 5.2% in its biggest one-day gain since August 2011, but has recently pulled back somewhat.
Read:Though weakened, Hurricane Irma continues to pound Florida (http://www.marketwatch.com/story/worst-case-scenario-as-hurricane-irma-makes-landfall-in-florida-2017-09-10)
On Friday, William Dudley, the president of the New York Federal Reserve, said havoc wreaked by Hurricanes Harvey and Irma could lift the U.S. economy (http://www.marketwatch.com/story/feds-dudley-says-hurricanes-harvey-irma-to-give-unfortunate-boost-to-us-economy-2017-09-08) in 2018, owing to the rebuilding that will be needed.
Verisk Analytics Inc.'s catastrophe modeling business AIR Worldwide estimates insured losses resulting from Hurricane Irma will be in the range of $20 billion to $40 billion (http://www.marketwatch.com/story/verisks-air-worldwide-sees-irma-related-insured-loss-much-less-than-harvey-related-damage-2017-09-11). That compares with AIR Worldwide's estimate of property damage resulting from Hurricane Harvey of more than $65 billion.
Meanwhile, investors may have gotten another break from easing geopolitical tensions. North Korea failed to conduct another missile test over the weekend, as some predicted might happen to mark the anniversary of the country's founding.
Cieszynski said that the lack of "a missile test or any other provocations" fell into the "no news is good news file."
Still, tensions may return with a U.N. Security Council vote due Monday that calls for further and tougher sanctions on the isolated nation. More saber rattling was heard out of North Korea on Monday over potentially harsher sanctions for the country after its sixth nuclear test.
If the U.S. does "rig up the illegal and unlawful 'resolution' on harsher sanctions, the DPRK shall make absolutely sure the U.S. pays due price," said North Korea's foreign ministry via a statement published by the official KCNA news agency, according to AFP (https://www.yahoo.com/news/north-korea-warns-us-greatest-pain-over-fresh-201000211.html).
There are no major economic data releases on the docket for Monday.
Stocks to watch: Shares of Teva Pharmaceutical Industries Ltd.(TEVA) were up 12% after the Israeli drug company on Monday named Lundbeck's Kare Schultz as its new chief executive. (http://www.marketwatch.com/story/teva-names-lundbecks-kare-schultz-as-new-ceo-2017-09-11)
(http://www.marketwatch.com/story/teva-names-lundbecks-kare-schultz-as-new-ceo-2017-09-11)Shares of The Walt Disney Co.(DIS) moved 0.2% higher as Irma moved across into Orlando. In a rare move (http://www.marketwatch.com/story/in-a-rare-move-walt-disney-world-to-close-for-hurricane-irma-2017-09-08), Walt Disney World was closed Saturday to prepare for the storm, and is expected to remain closed until at least Tuesday. Orlando hotels were reportedly full of storm evacuees.
Tesla Inc.(TSLA) rose 2.7%. The electric-car maker sent out a free software update (http://www.marketwatch.com/story/tesla-boosts-range-for-some-vehicles-in-florida-to-escape-irma-2017-09-10) temporarily extending the battery life for some of its cars to help owners evacuate the looming Irma storm.
Need to know:Here's the next catalyst for Tesla that has bulls fired up (http://www.marketwatch.com/story/heres-the-next-catalyst-for-tesla-that-has-bulls-fired-up-2017-09-11)
Other markets: Asian markets had a largely stronger day (http://www.marketwatch.com/story/asian-markets-rev-up-after-lull-in-north-korea-tensions-2017-09-10), keying off reduced fears over North Korea. The Nikkei 225 index bounced back from its worst week in seven months to gain 1.4% as the Japanese yen, a traditional haven in times of geopolitical and economic stress, weakened.
European stocks continued to press higher (http://www.marketwatch.com/story/european-stocks-bounce-up-as-appetite-for-risk-returns-2017-09-11), led by gains for insurers as Hurricane Irma lessened in severity.
The ICE Dollar Index rose 0.2% to 91.47, led by gains for the greenback against the yen , which rose to Yen108.55 from Yen107.84 late Friday. Gold , another haven asset, fell $10.40, or 0.8%, to $1,340.70 an ounce.
Oil prices were mixed, with WTI crude up 0.6%, to $47.75 a barrel. Brent crude was off 0.4% to $53.59 a barrel.
(END) Dow Jones Newswires
September 11, 2017 10:00 ET (14:00 GMT)