Katrina 1, Dow +65

Stocks closed green Monday as Hurricane Katrina
was downgraded to a Category 1 storm,
down from a category 5 just yesterday. Three quarters of a million homes in the
region lost power. Crude oil
briefly climbed above $70/barrel after offshore platforms were evacuated.
Transocean
(
RIG |
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PowerRating) reported a rig adrift in the Gulf (full story). Katrina could
be the most expensive storm in history, costing insurers an estimated $25
billion. Last year, insurers paid a record $22.9 billion on 4 hurricanes. Fitch
reports that Katrina could also be the largest insured loss for a single event,
behind September 11 and 1992’s Hurricane Andrew.

Among the insurers, Allstate
(
ALL |
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PowerRating) fell 0.77, Hartford
(
HIG |
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(
RNR |
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Re
(
RE |
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PowerRating), rose 0.05 and AIG
(
AIG |
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Airlines were weak, with AMR
(
AMR |
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Harrah’s
(
HET |
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HET rose 0.25.

In other hurricane-related issues, Home Depot
(
HD |
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PowerRating) gained  0773 and
Lowe’s
(
LOW |
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PowerRating) rose 1.42.

S&P 500 changes to note: Coventry Health
(
CVH |
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PowerRating) will replace May
(
MAY |
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PowerRating).

Strong Sectors were:   Biotech 
(
BTK |
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PowerRating)
+1.61%    Semis

(
SOX |
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PowerRating)
+1.34%    Oil

(
XOI |
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PowerRating)
+1.15%

Weak sectors
were:   Airlines

(
XAL |
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PowerRating)
-1.03%   

Apple Computer
(
AAPL |
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PowerRating) will purchase chips from Freescale
(
FSL |
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PowerRating).

A decision on Barr Labs‘
(
BRL |
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PowerRating) controversial contraceptive drug
drug Plan B has been delayed by the FDA. Prudential cut estimates.

Wachovia
(
WB |
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PowerRating) was upgraded to buy at Bank of America.       

Brice Wightman