Stocks skidded yesterday in the devastating aftermath of Hurricane Katrina, which slammed the Gulf Coast, pounding hotels and casinos, constricting...
NEW YORK — Stocks skidded yesterday in the devastating aftermath of Hurricane Katrina, which slammed the Gulf Coast, pounding hotels and casinos, constricting oil-refinery capacity and leaving insurers to cover losses estimated as high as $25 billion.
The Dow closed down 50.23 at 10,412.82.
Microsoft, one of the 30 Dow stocks, added 3 cents to close at $27.18 a share. Boeing, also a Dow stock, slid 84 cents to $66.75.
Broader stock indicators also dropped. The Standard & Poor’s 500 index fell 3.87 to 1,208.41, and the Nasdaq composite index fell 7.89 to 2,129.76.
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While major indexes gained Monday when the storm weakened, Wall Street’s spirits sank yesterday after the nation’s top disaster-relief official called the hurricane “catastrophic,” oil prices climbed and stocks in affected sectors continued to drop. The Dow Jones industrial average was down more than 100 points in late afternoon trading, but narrowed its losses toward the close.
“This is the kind of reaction everyone expected [Monday],” said John Caldwell, chief investment strategist for McDonald Financial Group, part of Cleveland-based KeyCorp.
Crude-oil futures hit record highs on fears that already tight refinery capacity would be further constrained as TV reports asserted widespread refinery shutdowns along the Gulf Coast and the Coast Guard said seven rigs are adrift in the Gulf of Mexico. A barrel of light crude settled at $69.81, up $2.61 a barrel on the New York Mercantile Exchange.
Notes released from the Federal Reserve’s last policy-maker meeting further aggravated equity investors. The notes signaled that rate increases could continue into 2006 and said inflation had “ticked up” since the policy-makers’ previous meeting, but indicated they decided not to accelerate the pace of short-term interest rate increases “for now.”
New Orleans is an important coffee port; coffee prices were sharply higher on commodities markets. Coffee retailer Starbucks fell 64 cents to $48.57.
Insurance stocks sagged again as damage estimates varied widely. Allstate fell 54 cents to $56.64 and MetLife fell 43 cents to $48.69. Seattle-based Safeco slipped 8 cents to $52.45.
Some gaming stocks fell again as casino operators assessed the damage to their Gulf Coast properties, which included reports of some casinos being swamped with water to the third floor. Harrah’s slumped $1.85 to $70.90 after reports that its Biloxi, Miss., riverboat casino had been destroyed.
Wal-Mart fell 46 cents to $45.19 after it said 123 of its 3,725 stores were closed by the hurricane.
Other retail stocks also slid after the International Council of Shopping Centers said sales fell for the fourth straight week. Retailers report August sales tomorrow and the market is not optimistic. J.C. Penney fell $1.82 to $48.66 and Target sank $1.58 to $54.14.