Stocks Decline as Storm Pressures Insurers and Oil Companies

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(AP Photo/Mark Lennihan, File)

U.S. stocks are slipping Monday as insurance companies and oil drillers are falling while Tropical Storm Harvey continues to dump rain on the Texas Gulf Coast. The price of crude oil is tumbling and gas prices are rising. Health-care companies are rising after hepatitis C and drug maker Gilead Sciences agreed to buy cancer drug maker Kite Pharma for $11.9 billion.

KEEPING SCORE: The Standard & Poor’s 500 index fell 2 points, or 0.1 percent, to 2,440 as of 1:30 p.m. Eastern time. The Dow Jones industrial average dipped 29 points, or 0.1 percent, to 21,784. The Nasdaq composite rose 10 points, or 0.2 percent, to 6,275. The Russell 2000 index of smaller-company stocks gained 1 point, or 0.1 percent, to 1,378. Most of the stocks on the New York Stock Exchange fell.

STORMY WEATHER: Tropical Storm Harvey continued to hit parts of Texas with historically heavy rains. The National Weather Service says some parts of Houston and its suburbs could get as much as 50 inches of rain before the storm abates, which isn’t expected to happen for days. The storm has shut down Texas’ oil and gas industry, and S&P Global analysts said about 2.2 million barrels per day of refining capacity were down or being brought down by Sunday.

ENERGY: Benchmark U.S. crude fell $1.50, or 3.1 percent, to $46.37 a barrel in New York. Brent crude, the international standard, slipped 56 cents, or 1.1 percent, to $51.42 a barrel in London.

Companies that drill for oil and operate offshore oil rigs fell because of the shutdowns. Apache fell $1.02, or 2.5 percent, to $39.05 and Anadarko Petroleum decreased $1.37, or 3.2 percent, to $40.99. Helmerich & Payne dipped $1.50, or 3.3 percent, to $43.29.

Wholesale gasoline futures rose 4 percent, or 2.4 percent, to $1.58 a gallon. Refining companies climbed, as they stand to benefit from higher gas prices. Valero Energy rose 83 cents, or 1.2 percent, to $68.50 and Marathon Petroleum advanced 71 cents, or 1.4 percent, to $52.43.

INSURANCE WOES: Insurance companies declined as investors worried that flooding from Harvey will lead to big losses. Travelers slumped $3.25, or 2.6 percent, to $123.22. Progressive shed $1.21, or 2.5 percent, to $47.19 and Chubb skidded $1.56, or 1.1 percent, to $142.07.

KITE GOES SOARING: Gilead Sciences, which makes treatments for hepatitis C, and other illnesses, will buy Kite Pharma for $11.9 billion, or $180 a share. Kite is studying treatments that can reprogram a patient’s immune cells to attack tumors, and it hopes to win approval this year for a blood cancer treatment. Kite is one of several companies researching CAR-T therapies, and Kite and Gilead hope it will win marketing approval later this year.

Kite Pharma stock jumped $39.16, or 28.2 percent, to $178.27. Gilead gained $1.75, or 2.4 percent, to $75.54, and biotechnology companies like Biogen, Amgen and Celgene also rose.

AFTER THE STORM: Stores in the areas affected by Harvey may be closed for a long time. Shoe retailer DSW fell 91 cents, or 4.5 percent, to $19.14. Sporting goods company Finish Line declined 25 cents, or 2.3 percent, to $10.42 and Boot Barn retreated 18 cents, or 2.1 percent, to $8.39. Citi Investment Research analyst Kate McShane noted that all three companies have large numbers of stores in Texas. Some companies that may play a role in cleanup efforts after the storm traded higher. Those included environmental services company Clean Harbors, which rose $1.51, or 2.9 percent, to $52.90.

BOOKED HIS DEPARTURE: Expedia slumped after reports that Dara Khosrowshahi, the travel booking site’s CEO, will leave to become CEO of ride-hailing app Uber. In an email to employees that was also submitted to regulators, company Chairman Barry Diller said Khosrowshahi has not yet accepted Uber’s offer, but that he will likely do so. Khosrowshahi has been CEO of Expedia since August, 2015. Expedia’s stock fell $6.31, or 4.2 percent, to $142.95.

METALS: Gold rose $16, or 1.2 percent, to $1,313.90 an ounce, its highest price in almost a year. Silver gained 37 cents, or 2.2 percent, to $17.42 an ounce. Copper picked up 3 cents, or 1 percent, to $3.06 a pound.

CURRENCIES: The euro rose to $1.1979 from $1.1888, and it is now at its highest level since the beginning of 2015. The European currency has been climbing recently because investors feel the European Central Bank isn’t going to take steps to keep the euro from getting stronger. That would make exports from European countries more expensive in other markets.

The dollar inched down to 109.14 yen from 109.24 yen late Friday.

BONDS: Bond prices edged higher. The yield on the 10-year Treasury note slipped to 2.16 percent from 2.17 percent.

OVERSEAS: The CAC 40 in France fell 0.5 percent and the DAX in Germany sank 0.4 percent. British markets were closed for a public holiday. Japan’s benchmark Nikkei 225 index took a negligible loss and the South Korean Kospi lost 0.4 percent. The Hang Seng in Hong Kong rose less than 0.1 percent.

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