NEW YORK - Wall Street rallied Monday after Hurricane Katrina weakened, easing concerns about refinery outages along the Gulf of Mexico and pulling oil prices back from record highs.
Stocks opened lower but quickly rebounded as crude oil futures cooled after surging past $70 a barrel in early trading on news that the storm shut down about 8 percent of U.S. refining capacity. A barrel of light crude settled at $67.20, up $1.20 on the New York Mercantile Exchange.
Investors found some relief in reports that President Bush was mulling whether to offset the supply disruption with oil from the nation's petroleum reserve, but energy and insurance stocks still came under pressure as the market tried to gauge the hurricane's financial impact.
Jim Dunigan, chief investment officer for PNC Advisors, said the market had braced for the storm and started looking elsewhere for direction after the Gulf Coast got "hit full force and survived."
"It's not likely this is going to have a significant impact on growth," Dunigan said. "If it's not going to have a significant impact on energy, we're still in pretty good shape."
The Dow Jones industrial average climbed 65.76, or 0.63 percent, to close at 10,463.05. Last Friday, the Dow had its lowest close in seven weeks.
The Standard & Poor's 500 index gained 7.18, or 0.6 percent, to 1,212.28, and the Nasdaq composite index rose 16.88, or 0.80 percent, to 2,137.65.
Much of Wall Street's advance came late in the day, when the hurricane eventually diminished to a Category 1 storm. With Katrina passing through the heart of the United States' oil and gas infrastructure, the market weighed a spike in energy prices against the potential for long-term production outages. The storm forced the Louisiana Offshore Oil Port - the nation's largest import terminal - to evacuate workers and stop unloading ships over the weekend.
"Clearly it's going to have some impact on the market if there is damage that will keep "the port' closed," said John Caldwell, chief investment strategist for McDonald Financial Group.
ExxonMobil Corp. gained as much as 83 cents in morning activity but ended the day up a penny at $58.42, while Chevron Corp. rose 13 cents to $59.51 and BP Plc added 23 cents to $66.35. Offshore drilling contractor Halliburton Co. jumped 54 cents to $57.80.
Home Depot Inc. and Lowe's Cos. also advanced on optimism that consumers spent more at the home improvement stores as they readied for the hurricane, and that they'd be buying materials to repair storm damage. Home Depot climbed 73 cents to $40.54, and Lowe's rose $1.42 to $64.60.
However, insurance stocks took a hit after projections pegged storm losses between $9-billion and $16-billion, which would rank Katrina among the nation's most costly storms. Allstate Corp. dropped 77 cents to $57.18 and RenaissanceRe Holdings Ltd. fell 73 cents to $45.52, while Everest Re Group Ltd. rose 5 cents to $93.92.
