Stocks traded mixed as the Dow fell while the NASDAQ gained. At the close the Dow was off 5 points to 21,808. Trading volume was lower. The NASDAQ gained 17 points on heavy trade to 6,283.
Hurricane Harvey is creating all kinds of turmoil. Insurance stocks are getting pummeled while home improvement stocks were up in anticipation of having to basically rebuild Houston. Allstate, Berkshire Hathaway and AIG were lower as estimates of damage in Texas are now hitting the “Katrina level” and could even go higher thanks to a rain dump of biblical proportions. Meanwhile Home Depot and Lowes were higher in anticipation of demand from home rebuilding. While it is hard to predict the outcome I think that lumber, appliances and such will be in demand as Houston rebuilds from such a tragic event.
Gasoline prices hit a two year high as 10 refineries were shut down when Harvey hit the breadbasket of US oil production. Exxon, Royal Dutch and Valero refineries in the area, which account for an estimated 2.2 million barrels of daily capacity, were shuttered which resulted in a 5% jump in gasoline prices. According to some sources prices could rise another 15% if these outfits are not operational by next week. Pipelines in the region have also been shut off as has 22% of gulf coast oil production.
Amazon is lowering prices in Whole Foods stores by 30% to 40% in a move that could spark a price war in the grocery business. The news of the price cuts sent grocer stocks like Kroger and Costco lower. It will be interesting to watch but the big question remains……“Will Amazon buy Cabela’s and lower their prices as well?”