Stock indexes surged early Monday and continued climbing, with optimism driven by lower-than-expected damage from Hurricane Irma, anticipation of Tuesday’s new iPhone announcement by Apple and, perhaps, a sense of declining tensions with North Korea.
The S&P 500 had gained more than 1% to reach as high as $2,488 by the early afternoon, a new record for the index. The Dow Jones Industrial Average gained more than 1.22% to reach 22,060, within striking distance of the Aug. 7 record of $22,118. Even as swaths of Florida remained underwater and Georgia braced for its own brush with Irma, the storm was successively downgraded from Category 4 to Category 3, then Category 2 as it made its way north. Traveller’s Insurance, spared from what could have been catastrophic claims, was up nearly 3% by midday. Progressive Insurance was up nearly 2%.
But Lowe’s and Home Depot stock both took an early beating before recovering some losses. The full force of the hurricane could have generated huge demand for home repair supplies and other hardware. Despite the market’s overall optimism, damages from Irma are still expected to be massive. A JP Morgan analyst wrote Monday that, even at the low end of projections, the storm could rank among the five biggest hurricanes in U.S. history by insured losses.
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TD Ameritrade chief market strategist JJ Kinahan told CNN that investors were also relieved by the lack of new aggressive statements out of North Korea. The United Nations Security Council was set to vote on new sanctions against the country on Monday, but an initial U.S. proposal that triggered threats from Pyongyang has been softened substantially.
Apple was a big winner, up nearly 2% ahead of Tuesday’s highly anticipated announcement of a new line of iPhones. Many details of the devices leaked over the weekend.