Wall Street up 1 percent as Irma, North Korea fears ease

By Sruthi Shankar

(Reuters) - Three major U.S. indexes rose more than 1 percent on Monday as Irma's downgrade to a tropical storm eased concerns about its impact on economic growth, and as North Korea refrained from any missile tests over the weekend, as feared.

All the 11 major S&P sectors were higher, led by gains in technology and financial stocks, with insurers advancing as Irma's fury petered out.

Irma, once ranked as one of the most powerful hurricane recorded in the Atlantic, was downgraded to a tropical storm in the morning, but still caused severe flooding in many Florida cities and left more than 6 million homes and businesses without power.

 

However, Irma's weakening meant its impact on economic growth would not be as much as expected. That came as a relief, especially in the wake of Hurricane Harvey, whose devastation is estimated to dent third-quarter economic growth.

Geopolitical tensions also eased as North Korea held a massive celebration on its founding day on Saturday, instead of another long-range missile launch as the United States and its allies were bracing for.

"It is a risk back on situation, people are going back into the market," said Neil Massa, senior equity trader at Manulife Asset Management in Boston.

"For now, it is a relief rally for things on both ends - geopolitical and weather wise - as it did not come in too bad."

At 12:32 p.m. ET (1632 GMT), the Dow Jones Industrial Average was up 247.18 points, or 1.13 percent, at 22,044.97 and the S&P 500 was up 25.11 points, or 1.02 percent, at 2,486.54.

The Nasdaq Composite was up 68.80 points, or 1.08 percent, at 6,428.99.

World stocks climbed to a record high and the dollar gained, while gold retreated from Friday's 13-month high.

The CBOE volatility index, a widely followed measure of market anxiety, fell more than 12 percent to 10.80, on track for its biggest percentage decline since Aug. 22.

The financial sector was up 1.69 percent. Goldman Sachs' 1.8 percent rise led the Dow higher, followed by insurer Travelers, which rose 2.94 percent.

Other insurers, especially the ones with exposure to Florida, also gained. Universal Insurance Holdings and HCI Group surged more than 15 percent, while Heritage Insurance soared 23 percent.

The technology sector jumped 1.46 percent. Apple rose nearly 2 percent a day ahead of the launch of the new iPhone, providing the biggest boost to the Nasdaq and S&P.

Tesla rose 4.6 percent to $359.42 on news that China is studying when to ban the production and sale of cars using traditional fuels.

Teva jumped 22 percent after the generics drugmaker named a new chief executive.

Advancing issues outnumbered decliners on the NYSE by 2,298 to 529. On the Nasdaq, 2,062 issues rose and 790 fell.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Savio D'Souza)