Hurricane Irma, North Korea worries fade as Dow jumps
U.S. stocks rallied to record highs Monday as Hurricane Irma weakened without causing as much damage as many had feared, and a North Korean holiday passed without new missile launches. Financial and technology companies lead the way.
Investors were relieved as Irma, which is still deluging Florida and Georgia, didn't appear to be as bad as it did in projections last week. Insurance companies jumped, especially smaller ones that do a lot of business in Florida. So did travel companies. Home improvement retailers fell. Their stocks had climbed recently as investors expected post-storm repairs to boost their business.
Tensions between the U.S. and North Korea have been on investors' minds recently, and on Monday global markets advanced as the situation didn't get any worse. In the U.S., bond prices fell, sending yields higher. That helped bank stocks because rising yields mean banks can charge higher interest rates on loans.
"This is what happens when the market sells off in the face of what is really an awfully good fundamental environment," said Jim Paulsen, chief investment strategist for the Leuthold Group. He said investors are once again focused on strong economic growth in the U.S. and many other regions.
Nordstrom's no-merchandise store puzzles investors
Nordstrom's plan to open a smaller store concept with no inventory isn't sitting well with investors.
The shares suffered their worst decline in more than a month after the department-store chain announced the new "neighborhood-hub" shop, which will open on Oct. 3 in West Hollywood, California. The idea is to let customers try on clothing and accessories with the help of a personal stylist. If shoppers like what they see, they can order the goods and have them delivered.
The move embraces a model used by upstarts such as Warby Parker and Bonobos, which generally rely on e-commerce but have boutiques where customers can touch and feel the wares. Smaller shops in urban areas also are less reliant on shopping-mall traffic to fuel sales.
But Nordstrom is an upscale chain known for its selection and service, so the minimalist approach was puzzling to investors. On a day when shares of most major retailers were climbing, Nordstrom fell as much as 5.4 percent to $43.59. The stock had been down 3.8 percent this year through the end of last week.
Five states sue administration over fuel economy fines
New York, California and three other states are suing the Trump administration, saying it must put in place higher penalties for automakers that violate federal fuel economy standards.
The U.S. Department of Transportation more than doubled civil penalties for fuel economy violations last year after Congress ordered agencies to adjust their fines for inflation.
The new rule, which was set to take effect in July, would require automakers to pay $14 for every tenth of a mile per gallon of fuel a vehicle consumes over its minimum fuel economy, multiplied by the number of vehicles sold. Since the mid-1970s, automakers have paid $5.50 for every tenth of a mile per gallon over the limit.
Automakers objected, saying the change would cost them $1 billion per year. The federal government delayed the rule indefinitely in July, saying it didn't adequately consider the cost to automakers.
- From wire reports
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