Stock Rise After Irma Lands, North Korea Stays Quiet

By Marina ForceFeaturesDow Jones Newswires

Stocks rose and haven assets retreated Monday as fears eased among investors about a standoff with North Korea and the severity of the impact of Hurricane Irma on the U.S. economy.

The Dow Jones Industrial Average rose 187 points, or 0.9%, to 21984 in recent trading. The S&P 500 climbed 0.8% and the Nasdaq Composite jumped 1.1%.

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Government bond prices declined, pushing up yields. The yield on the 10-year U.S. Treasury note rose to 2.113% in recent trading, compared with Friday's close of 2.058%, according to Tradeweb.

The WSJ Dollar Index, which measures the U.S. dollar against a basket of other currencies, rose 0.3%, after sinking to its lowest level in more than two years on Friday. The euro fell 0.5% against the greenback, paring some of last week's gains, to trade at $1.1979.

The moves marked a reversal from the past week, when all three major stock indexes posted declines, the dollar weakened and government bond yields fell. Investors worried at the time about worst-case scenarios from summer storms and the continuing U.S. tension with North Korea over missile testing.

Some analysts had expected North Korea to conduct a weapons test on Saturday, coinciding with the country's founding day, as it did last year to mark the celebration. The absence of news from Pyongyang, however, supported stocks and the dollar, while weighing on haven assets, analysts say.

Many analysts don't expect this relative calm to last, however, and bond yields could decrease if tensions once again rise in North Korea.

Meanwhile, concerns about the impact of Hurricane Irma on the U.S. economy also decreased, after it hit Florida on Sunday with the strength of a Category 4 storm, instead of a Category 5 hurricane, as many analysts feared. It also took a westerly course, meaning there was no direct hit on Miami. The combination of reductions in the storm's strength and a shifted course meant insured damage estimates are likely to be less than originally anticipated by some analysts.

Irma weakened further Monday, although the National Weather Service said the extreme storm conditions would continue for much of central and western Florida.

Reinsurance companies, which tumbled last week as they are expected to bear the financial brunt of Hurricane Irma's damage, jumped on Monday. Everest Re Group, which dropped more than 10% last week, rose 10% in recent trading. Chubb rose 3.4% and XL Group climbed 8.3%.

The Stoxx Europe 600 moved 0.9% higher, led by gains in bank, insurance and technology shares -- sectors that post hefty gains whenever investors feel confident enough to take on more risk.

Gold, another traditional haven for money managers, fell 0.9%. The Japanese yen and the Swiss franc, which traditionally rise when markets fall, both lost 0.7% against the U.S. dollar.

The weaker yen boosted Japanese blue-chip stocks, because investors measure the performance of these multinationals against revenue earned in foreign currencies abroad. The Nikkei 225 rose 1.4%, after setting fresh four-month lows on Friday and logging its worst week in seven months.

Elsewhere, South Korea's Kospi added 0.7%, and Australia's S&P/200 rose 0.7%.

-- Corrie Driebusch contributed to this article

(END) Dow Jones Newswires

September 11, 2017 10:14 ET (14:14 GMT)