Markets suffered losses on Friday after Hurricane Irma gained traction, destroying swathes of the Caribbean and sending insurance stocks lower. Meanwhile, home improvement stocks rose ahead of Irma’s fallout. Investor sentiment was also hurt following reports that North Korea would likely test another nuclear missile over the weekend to celebrate their foundation day. Meanwhile, the House of Representatives passed the Hurricane Harvey relief legislation, extending the debt-ceiling deadline through Dec 8.
The Dow Jones Industrial Average (DJIA) closed at 21,797.79, gaining 0.1%. The S&P 500 Index (INX) decreased 0.2% to close at 2,461.43. Meanwhile, the Nasdaq Composite Index (IXIC) closed at 6,360.19, declining 0.6%. A total of 6 billion shares were traded on Friday, higher than the last 20-session average of 5.8 billion shares. Declining issues outnumbered advancers on the NYSE by 1.19-to-1 ratio. On the Nasdaq, advancers outnumbered decliners by a 1.01-to-1 ratio. The CBOE VIX increased 1.1% to close at 104.74.
North Korea and Hurricane Irma Keep Investors on the Edge
Markets suffered broad based losses on Friday after Hurricane Irma gained traction. Irma comes just weeks after Hurricane Harvey destroyed the Houston area of Texas. Hurricane Irma destroyed parts of the Caribbean on Thursday and was expected to make a landfall on the coast of Florida over the weekend. This sent insurance stocks lower on Thursday. The hurricane was later degraded to Category 4 on Friday.
Insurance stocks did bounce back on Friday afternoon but closed lower for the week. Shares of XL Group (XL - Free Report) and RenaissanceRe Holdings (RNR - Free Report) declined 5% and 6.4% respectively for the week. On the contrary, home improvement stocks rose ahead of Irma’s fallout. Shares of Home Depot (HD - Free Report) and Lowe’s (LOW - Free Report) gained 1.1% each on Friday. Markets also suffered losses on Friday following speculations about North Korea testing another nuclear missile over the weekend which coincides with their foundation day. HD possesses Zacks Rank #2 (Buy) whereas all the other companies possess a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
House of Representatives Pass the Hurricane Aid Legislation
Earlier last week, President Trump placed his weight behind Democrats, supporting the extension of the debt ceiling deadline in order to fund a relief program to tackle the aftermath of Hurricane Harvey. The House of Representatives passed the Bill on Friday, extending the debt-ceiling deadline through Dec 8, 2017. The legislation includes $15.25 billion for the relief of victims of Hurricane Harvey. The amount also provides for possible recovery efforts in case of any casualties after Hurricane Irma’s expected landfall over the weekend.
On the economic data front, wholesale inventories for the month of July increased 0.6% from the previous period, whereas the consensus estimate was an increase of 0.4%.
For the week the Dow, the S&P 500 and the Nasdaq declined 0.9%, 0.6% and 1.2% respectively. Reports from South Korea indicated that Pyongyang would test another missile over the weekend to celebrate their foundation day. Such news led investors to rotate out of financial stocks into bonds, leading to broad based losses. President Trump reached an agreement with key members of Congress to extend the debt ceiling deadline. This was done to aid the relief funding for victims of Hurricane Harvey. Meanwhile, Fed’s Vice Chairman announced his plans to retire in mid-October, citing ‘personal reasons’ behind his decision. Meanwhile, the ECB decided unanimously that interest rates would remain unchanged.
Stocks That Made Headlines
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Southwest Airlines August Traffic Up, Q3 RASM View Bearish
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