Economy

Wall Street Stages Sharp Rally as Weaker Irma Shores Up Investor Optimism

Wall Street Stages Sharp Rally as Weaker Irma Shores Up Investor Optimism”

Insurers and travel companies did well in USA markets Monday, while home improvement stocks declined on expectations of less business from storm repairs.

Tensions between the US and North Korea have been on investors' minds recently, and on Monday global markets advanced as the situation didn't get any worse.

- The MSCI All-Country World Index climbed 0.8 percent to the highest on record. Banks rose, as JPMorgan Chase gained $1.37, or 1.5 percent, to $89.79 and Fifth Third Bancorp added 60 cents, or 2.4 percent, to $25.70. The S&P 500 index was up 26.68 points to 2,488.11 and the Nasdaq composite index gained 72.07 points to 6,432.26. The Russell 2000 index of smaller-company stocks added 15.40 points, or 1.1 percent, to 1,414.83.

USA stocks rose to a record, the dollar strengthened and Treasuries tumbled as investors piled into riskier assets after Hurricane Irma wreaked less damage than forecast and North Korea failed to exacerbate tensions.

The kiwi didn't move much after figures showed New Zealand retail spending on electronic cards fell 0.2 percent in August from July, seasonally adjusted. Still, nearly 7 million were without power and millions were displaced in what may go down as one of the worst storms in Florida's history.

Irma weakened shortly before it came ashore Sunday, and while the damage is still being assessed, insurers anticipate they won't have to pay out as much in claims as it looked like they would last week.

HCI Group jumped $5, or 16.3 percent, to $35.78 while Heritage Insurance gained $2.22, or 23.7 percent, to $11.59. Larger insurers also rallied. Their stocks had climbed recently as investors expected post-storm repairs to boost their business. Royal Caribbean Cruises jumped $4.02, or 3.4 percent, to $121.47 and American Airlines gained $1.55, or 3.4 percent, to $45.15. Travel booking site Priceline rose $30.29, or 1.6 percent, to $1,868.86. Home improvement retailers fell. They climbed last week after investors anticipated their business could pick up as homeowners were affected by the storm.

- The euro declined 0.7 percent to $1.1952, the first retreat in more than a week.

Orange juice prices, which surged in early September, gave up some of their recent gains. Meanwhile, North Korea celebrated its 69th anniversary without testing any missiles or nuclear bombs alleviating concern it would use the occasion to flaunt its fire power. In the USA, bond prices fell, sending yields higher. The price of gold fell $14.20, or 1.1 percent, to $1,337 an ounce. Those companies tend to do better when bond yields are falling, as investors see them as an alternative to bonds due to their large dividend payments.

European shares rose to a five-week high, extending the relief bounce seen in the previous session and Wall Street advanced, led by gains in financial and industrial stocks. Apple, which will unveil its newest iPhone on Tuesday, rose $2.92, or 1.8 percent, to $161.55 and Facebook rose $2.33, or 1.4 percent, to $173.28. Microsoft added 66 cents to $74.65 and Mastercard rose $4.36, or 3.2 percent, to $141.58.

The euro eased to US$1.2015, having hit a top of US$1.2092 on Friday amid speculation the European Central Bank was closer to starting a wind-back of its stimulus program.

In currency markets, the Canadian dollar was trading at an average price of 82.45 cents United States, up 0.02 of a USA cent.

Germany's DAX gained 1.4 percent and the French CAC 40 rose 1.2 percent.

- The MSCI Emerging Market Index increased 0.7 percent to the highest in three years.

- The Japanese yen sank 1.5 percent, the most since January, to 109.45 per dollar. Hong Kong's Hang Seng inched down but was little changed at 27,944.98, while the Shanghai Composite gained almost 0.1 percent to 3,379.49.



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