Market Snapshot: U.S. stock market fights for gains in Hurricane Harvey’s wake
U.S. stock futures pointed to a slightly higher open Monday, with oil stocks set to be in focus as investors try to gauge the extent of damage at energy facilities after then-Hurricane Harvey slammed into Texas.
Futures continued to climb after even after data showed the trade gap widened in July by 1.78% to 65.1 billion.
Futures for Dow Jones Industrial Average YMU7, -0.12% were 32 points higher to 21,842.00, and S&P 500 futures ESU7, +0.05% rose 4.5 points, or 0.2%, to 2,447. Nasdaq-100 futures NQU7, +0.07% tacked on 13.75 points, or 0.2%, at 5,837.75.
The devastation of now-Tropical Storm Harvey will be front of investors’ minds as trading begins Monday. Houston, the fourth-largest city in the U.S., is grappling with unprecedented flooding and officials reportedly responded to more than 1,000 calls for rescue. The National Weather Service warned that rainfall may exceed a record-breaking 50 inches in areas around Houston.
The storm, which was moving toward Louisiana early Monday, knocked out almost 15% of the nation’s fuel-making capacity and further disruptions were anticipated. The coast of Texas hosts nearly 30% of U.S. refining capacity, and Houston-area plants account for roughly half of that.
Read: Houston flooding expected to cause bumpy ride for energy markets
That led to U.S. gasoline futures jumping nearly 6% early Monday. September Nymex futures RBU7, +3.92% recently traded 5% higher at $ 1.750 per gallon, and the more active October contract RBV7, +3.28% climbed nearly 4%.
Shares of energy companies were trading higher premarket even as some major companies shut down their refineries. Exxon Mobil Corp. XOM, -0.14% shut its Baytown refinery — the second largest in the U.S. — in a Houston suburb because of the heavy floodwaters, and Royal Dutch Shell PLC RDS.B, -0.01% said it stopped making fuel at its Deer Park, Texas, plant. Exxon shares were up 0.4%, while Chevron Corp. CVX, -0.11% shares are up 0.7%.
“Although the full impact of the storm’s damage is yet to be determined, the markets expect the impact will be felt globally and affect energy markets for many weeks,” analysts at FxPro said Monday. “Following Hurricane Katrina in 2005, U.S. economic growth dropped by 50% in a quarter, therefore markets will be closely watching the damage from Harvey and its effect on the U.S. economy.”
Read: Insurance industry to easily absorb losses from Harvey, experts say
The SPDR Energy Select Sector exchange-traded fund XLE, -0.12% should also be active as investors watch for more developments about the country’s energy infrastructure. That ETF on Friday rose 0.4%, a fourth-consecutive advance.
The dollar also holds the potential of driving the direction of Wall Street Monday, with the ICE Dollar DXY, +0.11% down 0.3% to 92.47, then recovering somewhat, as the greenback lost ground against the yen, the euro and pound.
U.S. stocks on Friday closed mixed after neither Federal Reserve Chairwoman Janet Yellen nor European Central Bank President Mario Draghi offered clues about future monetary policy. The Dow Jones Industrial Average DJIA, -0.09% ended up 0.1% and the S&P 500 index SPX, +0.01% rose 0.2%, but the Nasdaq Composite Index COMP, +0.07% shed 0.1%.
Still, all three benchmarks finished last week with gains.
Economic data: The Commerce Department’s report showed that the advanced trade gap in goods — services are excluded — widened by 1.8% to $ 65.1 billion in July. Both exports and imports declined, but exports dropped at a faster pace in the month. The gap was wider than expected.
The Dallas Fed survey of manufacturing activity will be released at 10:30 a.m. Eastern.
See: MarketWatch’s economic calendar
Corporates: Gilead Sciences Inc. shares GILD, +1.57% rose 1% ahead of the bell following a Wall Street Journal report that the company will buy Kite Pharma Inc. KITE, +28.81% for about $ 11 billion. Kite shares rose 16% in low premarket volume.
Shares of Expedia Inc. EXPE, -4.42% fell 3% after news that Chief Executive Dara Khosrowshahi is leaving the company to become Uber’s CEO.
Aveo Pharmaceuticals Inc. AVEO, +3.16% rallied 20% premarket after the company’s Fotivda, or tivozanib, treatment for advanced renal cell carcinoma has been approved in the European Union.
Other markets: Elsewhere in the energy markets, West Texas Intermediate oil futures CLV7, -1.55% fell about 1% to $ 47.42 a barrel, and October Brent crude LCOV7, -0.38% darted between gains and losses.
Gold prices GCZ7, +0.43% were up 0.5% at $ 1304 an ounce.
In Asia, Hong Kong’s Hang Seng Index HSI, +0.05% edged up 0.1% while the Japan’s Nikkei Average NIK, -0.01% ended fractionally lower. European equities SXXP, -0.27% fell as the euro EURUSD, +0.1342% hit its highest against the dollar in more than two years.
Trading in the U.K. was closed for the August bank holiday.