Shares of retailers and other consumer-services companies rose after auto makers posted higher sales, boosted by demand for replacements to damaged vehicles in Houston and Florida after hurricanes Harvey and Irma. General Motors, Ford Motor and Toyota Motor saw sales increases of 9% or more, alleviating concerns about slowing sales. The hurricanes could also affect activity in the housing market, according to one brokerage. "The housing market this year has shown stronger-than-expected home price appreciation but weaker home sales and construction," said analysts at brokerage Bank of America Merrill Lynch Global Research. "An increase in prices despite tepid sales is indicative of a housing market with restrictive supply." There are some signs of a broader slowdown, which the BofA analysts attribute to a seasonal shift in sales to the winter months of 2016 and 2017, which were warmer than usual. "Looking ahead, Hurricanes Harvey and Irma threaten to continue to weigh on activity," said the BofA analysts. "Texas and Florida are particularly important states when it comes to housing activity - nearly 25% of housing starts in the nation are in those two states. The risk is that starts and sales remain weak in the coming months before rebounding as rebuilding efforts get underway." On Tuesday, the National Retail Federation said it expects holiday retail sales, which excludes autos, gasoline and restaurants, to increase between 3.6% and 4% in November and December, up from $655.8 billion last year. But spending is steadily shifting from bricks-and-mortar retailers to online venues, and that trend is unlikely to slow this season.
-Rob Curran, firstname.lastname@example.org
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October 03, 2017 16:19 ET (20:19 GMT)