The New York Times
NEW YORK – Shares of U.S. home improvement retailers and oil refiners climbed on Monday as flooding from Tropical Storm Harvey in Houston, Texas, was likely to worsen in the fourth-largest U.S. city.
Harvey, which made landfall late on Friday as the most powerful hurricane to hit Texas in more than 50 years, has killed at least two people. It has since hovered around Texas’ Gulf Coast, where it is forecast to remain for several more days.
On Wall Street, shares of companies likely to benefit from rebuilding efforts in the region advanced.
Home Depot climbed 1.0 percent to $151.21, while competitor Lowe’s Companies gained 0.5 percent to $73.73. Power generator manufacturer Generac slipped 1.24 percent to $38.11 after hitting a three-week high of $38.99.
“Home Depot will most certainly see a financial benefit from Hurricane Harvey, just as it did from Hurricane Sandy back in 2013,” said Neil Saunders, managing director of GlobalData Retail.
“The impact of Harvey should, however, be even greater both because of the scale of the storm and because since 2013, Home Depot has widened its appeal to the professional segment of the market.”
Shares of building material maker USG Corp jumped 4.5 percent to $27.96. The stock was on track for its best day since Nov. 10.
U.S. gasoline prices hit two-year highs as massive flooding triggered by the storm forced refineries in the area to close. That sent oil refiners’ stocks higher, with Phillips 66 up 0.2 percent to $83.62 and Valero Energy 1.2 percent higher at $68.47.
The S&P 1500 oil and gas refining index jumped 1.94 percent.
U.S. crude futures fell as refinery shutdowns could reduce demand for American crude, while gasoline prices were expected to rise and help mitigate any repair costs.
“Refining is where it is at, because that is where you have pricing power. This just underscores the significance of that pricing power,” said Peter Kenny, senior market strategist at Global Markets Advisory Group, in New York.
“It is unfortunate and very unwelcome but an event like this just really drives that home.”
Other companies expected to be affected include those in the insurance sector, auto manufacturers and food retailers. . . .
Private forecaster Planalytics estimated the initial impact from Harvey, in terms of lost sales for the retail and consumer sector, to be $1 billion. Planalytics expects restaurants to take the biggest hit, followed by malls and apparel stores as these businesses do not make up for lost customer traffic. (Additional reporting by Sruthi Ramakrishnan and Nandita Bose; Editing by Bernadette Baum and Dan Grebler)