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Wall Street forges onward as oil producers brace for hurricane

Agence France-Presse, Agence France-Presse
Wall Street forges onward as oil producers brace for hurricane

A gas terminal is seen as the first band of rain from Hurricane Laura passes in Lake Charles, Louisiana, on August 26, 2020. - Hurricane Laura is due to strengthen to Category 4 before slamming into the US south coast later Wednesday, forecasters said, as residents of coastal Texas and Louisiana were told to evacuate or shelter. With maximum sustained winds currently of 115 miles (185 kilometers) per hour, the hurricane could trigger a storm surge raising water levels by several feet and affecting areas as much as 30 miles inland. (Photo by ANDREW CABALLERO-REYNOLDS / AFP)

AFP

Hurricane Laura's imminent impact on the US Gulf Coast region sends oil prices climbing again and testing 5-month highs

Major Wall Street indices set records once again on Wednesday, August 26, shrugging off worries about a major hurricane approaching a key United States oil-producing region and renewed coronavirus fears that had stymied indices elsewhere.

Hurricane Laura’s imminent impact on the US Gulf Coast region sent oil prices climbing again and testing 5-month highs.

Around 3 million barrels a day of refining capacity have been closed after US authorities said the hurricane could bring “potentially catastrophic storm surges, extreme winds, and flash flooding.”

Futures prices for US benchmark West Texas Intermediate spiked at mid-session to break above $43.75 before slipping back slightly though still holding near a 5-month high.

But the hurricane uncertainty did not deter traders elsewhere in New York, who pushed the S&P 500 and Nasdaq to yet another record high close while the Dow finished up 0.3% despite weak opening momentum.

Apple gained 1.4% ahead of its four-to-one stock split, while Salesforce.com, which will join the Dow index on Monday, August 31, in place of global oil giant Exxon Mobil, leapt 26% after a strong earnings report.

Traders have been looking ahead to Thursday, August 27, when Fed Chair Jerome Powell will preview how the central bank signals the trajectory of interest rates in the coming months.

“Some of the stock market being up is a little bit of hopeful trading regarding this speech,” JJ Kinahan of TD Ameritrade told Agence France-Presse, suggesting observers might be disappointed.

Coronavirus rears anew

Earlier in the day, London and Paris made only the most meager of gains, not least over concern at the lingering presence of the coronavirus, although Frankfurt added 1%.

“Second wave fears are becoming more real in Europe as a number of countries, particularly tourist destinations such as Spain and France, are seeing a strong rise in COVID-19 cases,” City Index analyst Fiona Cincotta said.

“Governments…are showing reluctance to slap nationwide lockdowns into place just yet, but investor concerns are growing.”

While there are signs that COVID-19 is leveling off in the US, other countries are fighting to subdue new flare-ups, with Spain notably saying on Tuesday, August 25, it would call in the army and South Korea again closing schools and kindergartens in the greater Seoul region.

Observers warned the upcoming winter could see more infections as people are forced to stay indoors. 

“The situation is still far better than it was in the spring,” AxiCorp analyst Stephen Innes said.

“However, recent momentum and outbreaks around the world are worrying, as second- and third-wave coronavirus outbreaks still pose the most significant threat to the economic recovery.”

Key figures around 9:15 pm GMT
  • New York – Dow: UP 0.3% at 28,331.92 (close)
  • New York – S&P 500: UP 1% at 3,478.73 (close)
  • New York – Nasdaq: UP 1.7% at 11,665.06 (close)
  • London – FTSE 100: UP 0.1% at 6,045.60 points (close)
  • Frankfurt – DAX 30: UP 1% at 13,190.15 (close)
  • Paris – CAC 40: UP 0.8% at 5,048.43 (close)
  • EURO STOXX 50: UP 0.8% at 3,356.76 (close)
  • Tokyo – Nikkei 225: FLAT at 23,290.86 (close)
  • Hong Kong – Hang Seng: FLAT at 25,491.79 (close)
  • Shanghai – Composite: DOWN 1.3% at 3,329.74 (close)
  • Euro/dollar: DOWN at $1.1831 from $1.1835 at 9 pm GMT on Tuesday, August 25
  • Dollar/yen: DOWN at 105.97 yen from 106.39 yen
  • Pound/dollar: UP at $1.3203 from $1.3152
  • Euro/pound: DOWN at 89.54 pence from 89.99 pence
  • Brent North Sea crude: DOWN 0.2% at $45.78 per barrel
  • West Texas Intermediate: UP 0.1% at $43.41

– Rappler.com

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