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Hurricane Irma Lifts Construction Stocks & ETFs

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Hurricane Irma’s destructive power has already been felt throughout much of the Caribbean, and soon the tropical storm will hit Florida. With evacuations already underway throughout much of the state, and a great deal of damage projected, construction stocks and ETFs climbed on Friday.

Irma Update

New forecasts don’t look good for Florida, as there is now only a microscopic chance that the hurricane doesn’t hit the state almost directly.

“This is a catastrophic storm that this state has never seen,” Florida Governor Rick Scott said in a televised statement on Friday morning. “Based on what we now know, the majority of Florida will have major hurricane impacts, with deadly storm surge and life-threatening winds.”

The tropical storm has already killed at least 19 people in the Caribbean. And although Hurricane Irma has been downgraded to a Category 4 storm by the National Hurricane Center, its winds are still whipping at 155 mph.

Hurricane warnings are in place throughout much of southern Florida, where more than 6 million people live, and current projections show Irma continuing through most of Florida up into the southeastern U.S. until Monday night.

“Severe hurricane conditions are expected over portions of the Florida peninsula and the Florida Keys beginning Saturday night. Irma is likely to make landfall in southern Florida as a dangerous major hurricane, and bring life-threatening storm surge and wind impacts to much of the state,” the NHC said in a statement on Friday morning.

Construction Stocks

As the Hurricane Harvey recovery process starts in the Houston area and some of southwestern Louisiana, Irma’s devastation is just about to begin. The two storms will—in all likelihood—lead to billions of dollars’ worth of damage to homes, buildings, and infrastructure in both areas.

Still, despite the seemingly distasteful nature, this perfect storm has caused construction stocks to pop on Friday.

Shares of construction equipment giant Caterpillar (CAT - Free Report) gained 0.45% on Friday. Other companies in the industry also saw their stock prices rise before Irma makes landfall in Florida. Gibraltar Industries (ROCK - Free Report) stock jumped over 1.50%, while shares of United Rentals (URI - Free Report) and NCI Building Systems both climbed over 3.50%.

In preparation for the newest storm, construction and infrastructure ETFs saw gains as well. Shares of the SPDR S&P Homebuilders ETF (XHB - Free Report) , the PowerShares Dynamic Building & Const ETF (PKB - Free Report) , and the iShares U.S. Home Construction ETF (ITB - Free Report) all leapt higher.

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