Stocks head for weekly loss as insurance stocks fall before Irma
The S&P 500 traded lower on Friday as investors grew nervous ahead of Hurricane Irma and as falling rates plagued banking stocks.
The S&P 500 traded 0.03 percent lower, with industrials and energy contributing the largest losses. The Nasdaq composite fell 0.21 percent, with Apple and Cisco both down.
The Dow Jones industrial average rose 20 points, with Goldman Sachs and Travelers Companies contributing the most to the gains.
Shares of major insurance companies were set for weekly losses ahead of Hurricane Irma’s landfall in Florida. Both XL Group and RenaissanceRe traded higher, but remained 8.7 percent 9.3 percent lower respectively since Tuesday.
Restaurant companies including Fiesta Restaurant Group and Ruth’s Hospitality Group, which operates Ruth’s Chris Steak House, also posted week-to-date declines. Outback Steakhouse owner Bloomin’ Brands fell 3.5 percent since Tuesday.
Hurricane Irma was downgraded from a category 5 to a category 4 early on Friday, but the head of the Federal Emergency Management Agency (FEMA) warned that the storm will “devastate” parts of the country, reported Reuters. The storm lashed the Caribbean with devastating winds and torrential rain, leaving behind 14 deaths and a swathe of catastrophic destruction.
Home improvement and materials companies surged ahead of the storm’s projected destruction in Florida. Home Depot climbed 0.7 percent and Lowe’s added 0.5 percent, while Lumber Liquidators’ stock added another 1.1 percent to its weekly gains.
Bank stocks also caught a breather after falling throughout the week, as demand for safe haven assets steadily increased while investors grew more doubtful over a hike in interest rates by year’s end.
“I think beyond [Hurricane Irma] the focus is really on U.S. Treasury yields,” said FBN Securities Chief Market Strategist Jeremy Klein. “The 2 percent figure is pretty psychological.”
“If you break through that level, economists are going to have to sit down and really think about what’s happening here.”
Rising geopolitical tensions over North Korea have also pushed investors to buy haven currencies and bonds ahead of the country’s Foundation Day holiday, when it conducted a nuclear test a year ago.
Meanwhile, shares of Equifax fell 14 percent after the credit reporting agency revealed a massive data breach that exposed personal information of as many as 143 million consumers. The company also said three executives who sold shares days after the breach was discovered were unaware of the event.
The euro extended its weekly advance over the greenback after the European Central Bank boosted its growth forecast on Thursday. Though Wall Street expects the euro’s ascent to moderate, the euro gained 0.04 percent Friday after a 1 percent climb against the greenback Thursday.
Investors digested Thursday’s comments from ECB President Mario Draghi, after the central bank decided to leave its benchmark interest rate unchanged at its September meeting. Draghi hinted at starting to reduce the central bank’s bond-buying program as early as next month.
Collaboration between President Donald Trump and Democratic leaders has garnered attention from the Street this week. The Senate on Thursday approved a package that includes Hurricane Harvey recovery funds, a debt ceiling extension and temporary government funding.
The package came after President Donald Trump signaled his approval for the Democratic plan on Wednesday, hinting at possible compromises on future spending initiatives.