Stock futures rise after Irene weaker than feared

AP News
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Posted: Aug 29, 2011 9:03 AM
Stock futures rise after Irene weaker than feared

U.S. stock futures are rising after the damage from Tropical Storm Irene wound up being less than many analysts had anticipated.

The storm ripped through the East Coast and caused widespread flooding. Millions were without power. However, consulting firm Kinetic Analysis Corp. predicted that insured damages would range between $2 billion and $3 billion, lower than initially estimated. The insurance industry paid out $6 billion in damages after Hurricane Isabel hit the East Coast in 2003.

The lower damage estimates pushed insurance stocks higher. Hartford Financial Services Group Inc. rose 3 percent, while Allstate Corp. and Travelers Cos. Inc. each rose 2.5 percent in premarket trading.

Operators of the New York Stock Exchange and other major U.S. exchanges said they would open for trading as usual Monday. The Securities Industry and Financial Markets Association, which represents Wall Street banks, said it expects the bond market to operate normally.

Half an hour ahead of the opening bell, Dow Jones industrial average futures were up 109 points, or 1 percent, at 1,388. S&P 500 index futures rose 13, or 1.1 percent, to 1,189. Nasdaq 100 index futures rose 23, or 1.1 percent, at 2,187.

Volume was expected to be weak as transit disruptions made it difficult for Wall Street employees to get to work. Flooding and downed trees obstructed tracks throughout the commuter rail systems that bring workers in from the Connecticut, New York and New Jersey suburbs.

Partial subway service in New York restarted at 6 a.m. Transit officials said service would be less frequent than normal and that commuters should expect longer waits and more crowded trains.

Many traders were on vacation a week before the Labor Day holiday.

"I think it will be a relatively quiet day from a volume perspective," said Eric Noll, executive vice president of Nasdaq transaction services. "It's sometimes easy to forget in a hurricane that lots and lots of people are on vacation or planning to go on vacation."

An increase in consumer spending also sent stock index futures higher. The government reported that spending rose 0.8 percent in July, after Americans cut their spending for the first time in about two years in June.

The government releases its monthly jobs report on Friday, which is closely watched by investors and economists. Analysts expect that U.S. employers added 97,000 jobs in August, far less than the 117,000 jobs created in July.