U.S. stocks have shown solid gains on Monday, the first day of trading following the departure of Hurricane Irene after her steady ascent up the eastern seaboard over the weekend.
Investors appear to be relieved that the destruction wrought by the storm turned out to be less than feared.
Although the storm killed more than two dozen people, knocked out power to more than 4-million people from North Carolina to Maine, destroyed scores of houses and caused major flooding in many locales, the financial damages incurred will likely fall far below prior estimates.
As a result, insurance companies are flourishing in Monday’s session.
As of noon (EDT), AllState Corp. (NYSE: ALL) is up 7.0 percent; Hartford Financial Services (NYSE:HIG) is soaring 9.0 percent; while The Travelers Companies Inc. (NYSE: TRV) is up about 5.4 percent.
Indeed, SPDR KBW Insurance exchange-traded fund (NYSE: KIE) is up a handsome 4.7 percent.
Similarly, some big electric utility names are also rising in Monday trading, likely on assurances that power outages will be dealt with in a timely manner.
Duke Energy Corp. (NYSE: DUK), which has many customers in Irene-struck North Carolina, is up about 1.1 percent; while Dominion Resources (NYSE: D), which supplies much of Virginia, is up 0.4 percent; while Progress Energy Inc. (NYSE:PGN), another utility in the Carolinas, is up 1.7 percent.
The Dow Jones Utility Average Index is up 1.50 percent.
However, trading volume is expected to be very modest Monday and this week given that many traders are on summer holiday, while the sporadic availability of mass transit around New York will likely keep other traders home.
However, Sam Stovall, chief investment strategist, said that historically hurricanes have had little impact on stock market performance.
“History shows (but does not guarantee) that hurricanes don’t typically offer investment opportunities,” he said.
“Even though these localized natural disasters may spur regional economies, as property owners repair or rebuild, equity prices are more likely to be driven by wider-reaching national events.”
Palash has worked as a business journalist for 21 years in New York.