Stock of the insurance giant fell nearly 3% mid-afternoon as insurers scrambled to assess damages from Hurricane Harvey. At the same time, volatile energy markets responded to catastrophic destruction along the Texas coast.
The Dow Jones Industrial Average was down 21 points, or 0.1%, and the S&P 500 fell 0.06%. The Nasdaq rose 0.2%.
Hurricane Harvey has caused massive, unprecedented flooding in Corpus Christi, Texas, and Houston, and the storm's impact on the area's refineries, pipelines and storage remains unknown though there is some evidence of major losses.
The relentless rain from Harvey, which was downgraded to a tropical storm, brought as many as 50 inches of rain. Ahead of the hurricane, refiners shut down about 900,000 barrels per day of capacity, mostly in the Corpus Christi area. Before the Category 4 hurricane made landfall with winds of 130 miles per hour, the four refineries owned by Valero Energy Corp. (VLO) - Get Report and Citgo Petroleum and Flint Hill Resources shut down production on Thursday.
Exxon Mobil Corp. (XOM) - Get Report closed its Baytown refinery, located on the Houston Ship Channel, when floodwaters paralyzed large portions of the area after Harvey was downgraded to a tropical storm from a hurricane, according to the Journal. Exxon stock was down 0.5% in midday trading on Monday. The plant is the second-largest refinery in the country, processing as much as 560,000 barrels of oil a day.
Royal Dutch Shell Corp. (RDS.A) also shut down its Deer Park refinery. Shares were lower in midday trading.
The Wall Street Journal reported that Harvey knocked almost 15% of U.S. refinery capacity out of commission, which could boost fuel prices across the U.S. Gasoline futures spiked as high as 5% on Monday before erasing some gains to trade up around 2% by mid-afternoon. Futures for West Texas Intermediate crude oil for October delivery were down 3% to $46.42 Monday afternoon after surging on Friday.
Insurer Hanover Re is expecting total damages from Tropical Storm Harvey to fall below the levels of Hurricanes Katrina and Sandy. However, insurance research group the Insurance Information Institute told Fox Business that flood damage alone from the storm could match the $15 billion in damage it estimated Katrina caused. Sandy, which hit the Northeast in 2012, was responsible for $36 billion in damage while Katrina, which hit the Gulf Coast in 2005, caused damages topping $80 billion, according to Hanover.
United Continental Holdings Inc. (UAL) - Get Report had previously hoped to resume flying out of its Houston hub Monday evening, but the Federal Aviation Administration said flights in the area aren't likely to resume until Wednesday.
President Donald Trump will travel to Texas on Tuesday to review the state's recovery program following the storm. It's unclear where the president will visit, but Press Secretary Sarah Huckabee Sanders said the administration is still coordinating details and logistics with Texas officials.
Biopharmaceutical company Gilead Sciences Inc. (GILD) - Get Report agreed to buy Kite Pharma Inc. (KITE) for about $11 billion in cash. Kite has made waves in the drug industry for a promising new technology that harnesses the body's immune system to fight cancer.
Gilead will pay $180 a share, offering a 29% premium to Kite's Friday closing price.
The deal is expected to close in the fourth quarter of this year. Gilead stock traded up 2.1% Monday while Kite shares were surging 28%.
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Whole Foods Market Corp. (WFM) has begun slashing prices as much as 43% at its store on 57th street in Manhattan, Bloomberg reported Monday after performing a spot check at the store. Amazon.com Inc. (AMZN) - Get Report said that it expects to complete its acquisition of Whole Foods on Monday, about two months after it announced it was acquiring the company for $13.7 billion.
Apple Inc. (AAPL) - Get Report announced it will unveil the new iPhone 8 at an event on Sept. 12, according to Dow Jones. Apple is expected to debut several products including the new iPhone, a 4K Apple TV, and a new Apple Watch. The upcoming, highly anticipated iPhone 8 will boast OLED panels making the screen brighter and more vivid. The phone is also said to have a new 3D facial recognition scanner used not only to unlock the device but to process payments as well. This year's iPhone is expected to come out in mid-September once again, with the latest rumors saying September 22 could be the day.
And more good news for Apple: The New York City Police Department will have to replace up to 36,000 Windows phones that it bought for officers with new Apple iPhones because the Microsoft phones are obsolete and cannot be upgraded, the New York Post reported Monday.
Microsoft Corp. (MSFT) - Get Report discontinued the Nokia (NOK) - Get Report -made phones and pulled the listing of the last version of the phone from its website last week. The two versions of the phone the NYPD bought for employees ran on the Windows 8.1 operating system, which Microsoft announced it would stop supporting after July 11.
It's the final week of the month which means the labor market will go under the microscope again. The nonfarm payrolls report will be released on Friday, Sept. 1, in what is the most highly anticipated and closely scrutinized economic data point of any month.
The number of jobs added to the U.S. economy is expected to slow down after July marked the fifth month over 200,000 so far this year. Economists surveyed by FactSet anticipate 172,500 jobs to have been added to nonfarm payrolls in August, slowing from a pace of 209,000 in July.
The unemployment rate is expected to hold steady at 4.3%, while hourly earnings are forecast to have climbed 0.3% month on month. Private payrolls data from Automatic Data Processing will be released on Wednesday, Aug. 30.
The U.S. trade deficit in goods for July increased to $65.1 billion, topping economists' expectations of a $64.1 billion deficit.
Updated from 12:38 p.m. ET, Monday, Aug. 28.
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