Stock futures were narrowly higher on Monday, Aug. 28, as volatile energy markets responded to catastrophic damage along the Texas coast caused by Hurricane Harvey.
Dow Jones Industrial Average futures were up 0.1%, S&P 500 futures rose 0.14% and Nasdaq futures increased 0.15%.
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.
FactSet, quoting the U.S. Bureau of Safety and Environmental Enforcement, reported that 22% of daily oil output and 25.7% of gasoline production in the Gulf has been shut-in.
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 up 0.1% in premarket trading on Monday. The plant is the second-largest refinery in the country, processing as much as 560,000 barrels of oil a day.
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 more than 5% on Monday morning. Futures for West Texas Intermediate crude oil for October delivery were down 1% to $47.37 after surging on Friday.
Insurance stocks rose slightly at Friday's close in preparation for an increased volume of claims from Texans affected by the storm. Shares of Allstate Corp. (ALL - Get Report) , which is the second-biggest insurer in Texas, traded up 0.5% at Friday's closing bell but were down 1% premarket Monday. Total dollar amounts of damage remain unknown but are expected to be enormous.
Shares of generator manufacturer Gernerac Holdings Inc. (GNRC - Get Report) continued to rise Monday morning, with the stock trading up nearly 1% before the opening bell. Home-improvement retailers Home Depot Inc. (HD - Get Report) and Lowe's Cos. (LOW - Get Report) were climbing premarket Monday.
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 1.3% premarket Monday while Kite shares were surging nearly 29%.
After weeks of speculation, investors now know who will likely lead the beleaguered Uber Technologies Inc. after former CEO Travis Kalanick was ousted in late June amid a strong of public relations crises.
Recode's Kara Swisher and The New York Times' Mike Isaac both tweeted Sunday that Khosrowshahi, Expedia's CEO since 2005, will take Kalanick's old position. Khosrowshahi, a former investment banker, was previously an executive at IAC/InterActiveCorp and serves on the board of New York Times Co.
The final front-runners for the CEO post at Uber were Hewlett-Packard Enterprise Inc. CEO Meg Whitman, General Electric Co. Chairman Jeff Immelt and an unknown third candidate, presumably Khosrowshahi.
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.
More of What's Trending on TheStreet:
- With Hurricane Harvey, We Are in the Crosshairs of Volatility: Market Recon
- Houston, We Have a Problem: Harvey Slams Gulf Coast, Halts Oil Production
- Jeff Immelt Out of Running for Uber CEO Position -- Here's Who Got the Gig
- Here's Why Apple's HomePod Will Crush the Amazon Echo and Google Home Over Time
- Panic Isn't Lasting Long in This Stock Market