Stock futures were tightly mixed Monday as the shutdown and flooding of Texas coast continued and investors began to assess the rising financial impact of the storm.
Futures for the Dow Jones industrial average and the S&P 500 edged a fraction above fair value. Nasdaq 100 futures traded narrowly below the line.
Hurricane Harvey swept in as a category 4 story late Friday to cause wind damage along the south Texas coast, followed by historical levels of rain flooding cities north to Houston – the U.S. energy capital and fourth-largest city. The storm was downgraded to Tropical Storm status, relieving the threat of wind damage, but is projected to continue to deluge the already saturated Houston area with record levels of rainfall.
Oil prices dropped more than 1%, gasoline futures surged more than 5% as refinery operators inspected for possible damage after shut downs ahead of the storm. About 10 ten refineries representing an estimated 2.2 million barrels a day of capacity shut down in response to the storm, including flagship facilities owned by Exxon-Mobil (XOM), Valero (VLO) energy and Phillips 66 (PSX), according toe S&P Platts. A number of pipelines in the region and halted operation, and ports in Corpus Christi and Houston appeared to remain closed in inbound and outbound traffic on Monday. About 22% of offshore production in the Gulf Of Mexico had reportedly been shut down ahead of the storm.
Insurers Sag, Verizon Leads Dow, Kite Soars On Gilead Deal
With only a small handful of earnings reports due during Monday’s session, merger news grabbed early attention. Kite Pharmaceuticals (KITE) soared 28% after the Santa Monica, Calif.-based biotech agreed to an $11.9 billion takeover by Gilead Sciences (GILD). Gilead shares rose more than 2% in premarket trade.
Monday’s session gets a thin economic calendar, with July international trade in goods and advanced wholesale inventories numbers due out at 8:30 a.m. ET. The Dallas Federal Reserve’s regional manufacturing survey is expected at 10:30 a.m. ET.
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