PortfolioCrafter - Market Commentary 8/31/05
August 31st, 2005 / 6:21 pm / by portfoliocrafter
Although Hurricane Katrina had had a serious economic impact in the U.S. economy, stocks recovered from yesterday’s losses. The Dow rose 68.78 points, to close at 10,481.60. Besides, the Nasdaq rose 22.23 points, to finish session at 2,152.09. Meanwhile, the S&P closed at 1,220.33, after rising 11.92 points.
Crude oil prices were almost flat during today’s session to close at $69.75. Also, natural gas futures topped $12 per million. Even after two days of Hurricane Katrina’s disastrous appearance, the impact of the storm on individual sectors of the economy was still sinking in. According to analysts, the flooding in New Orleans could raise the exposure of insurance and reinsurance companies to greater-than-expected losses. Therefore, insurance damage claims could be huge.
Home Depot rallied 57 cents, to close at $40.32, due to an increased demand in the wake of Hurricane Katrina. Also, smaller rivals such as Lowe’s Cos. increased $1.42, to close at $64.31. Nevertheless, gaming companies with operations in Louisiana and Mississippi fell in value. For instance, Harrah’s Entertainment Inc. declined $1.34, to close at $69.56, after announcing that its New Orleans casino will remain closed for at least one month due to damages caused by Katrina.
In today’s speech, President George W. Bush said that he will help New Orleans, in addition to other devastated cities to rebuild their shattered communities. President said that “the great city of New Orleans will be back on its feet”. Also, Bush appointed Homeland Security Michael Chertoff to head a Cabinet-level response to what he termed “one of the worst natural disasters” in the history of the United States. Finally, he said that the Energy Department and Environmental Protection Agency (EPA) had acted to decrease shortages of gasoline. Crude petroleum from the strategic petroleum reserve will also be lent to refineries. Then, the EPA had issued waivers allowing a greater variety of gasoline to be sold.
All the best,
Manuel Jesus-Backus
The Portfolio Crafter
