Insurers drive stocks higher; Dow gains 254
NEW YORK - Stocks rose broadly Monday, led by insurance companies, after it became clear that Hurricane Irene caused far less damage than many had feared. The Dow Jones industrial average jumped 254 points.
NEW YORK - Stocks rose broadly Monday, led by insurance companies, after it became clear that Hurricane Irene caused far less damage than many had feared. The Dow Jones industrial average jumped 254 points.
Insurance stocks rose sharply as analysts lowered their estimates of how much damage the storm would cause. Allstate Corp. rose 8.5 percent, Hartford Financial Services Group Inc. rose 13 percent, and Travelers Cos. Inc. rose 5.1 percent. Insurance and banking stocks in the Standard & Poor's 500 rose 4.2 percent, the most of the 10 company groups that make up the index.
Kinetic Analysis Corp., a consulting firm, sharply lowered its estimate of storm damage from $20 billion late Thursday to $7 billion late Sunday as the storm weakened. Of that amount, insurers would probably have to cover up to $2.6 billion, Kinetic said. That's less than the $6 billion the industry paid out after Hurricane Isabel struck the region in 2003.
Utilities companies also rose after it became clear their storm-related expenses would be lower than earlier estimates. Duke Energy Corp., which serves customers in the Carolinas, rose 1.1 percent. New York's biggest utility company, Consolidated Edison Inc., rose 1.3 percent.
The Dow Jones industrial average rose 254.71 points, or 2.26 percent, to close at 11,539.25. It is now down just 0.3 percent for the year. It had been down as much as 7.4 percent for the year Aug. 10.
The Standard & Poor's 500 index rose 33.28 points, or 2.83 percent, to 1,210.08. The widely used market benchmark has now gained back all of the ground it lost since hitting a 2011 low Aug. 8, after Standard & Poor's downgraded the U.S. government's credit rating. Since then, it has risen 8.1 percent.
The technology-focused Nasdaq composite index rose 82.26, or 3.32 percent, to 2,562.11.
Bank of America Corp. rose 8.1 percent, the most of the 30 stocks that make up the Dow average, after the bank said it would sell half of its stake in China Construction Bank Corp. The bank has been selling assets to raise cash to comply with new banking regulations.
An increase in consumer spending also helped push stocks higher.
European stocks jumped after two Greek banks said they would combine to better weather that country's debt crisis.
