NEW YORK – Stocks slumped, then rebounded Monday as corporate acquisitions and gains in home-improvement retailers offset disruptions in energy production and record-high oil prices from Hurricane Katrina.
In late morning trading Monday, the blue-chip Dow Jones industrial average (search) was up 21 points at 10,418 while the technology-packed Nasdaq Composite Index (search) was up 3 points at 2,124. The broader Standard & Poor's 500 Index (search) was up 1 point at 1,206.
Crude oil futures briefly rose above $70 per barrel in electronic trading after Katrina slammed the Gulf coast early Monday morning and shut down an estimated 1 million barrels of refining capacity. A barrel of light crude jumped $3.01 to $69.14 on the New York Mercantile Exchange (search).
"It's just going to have an even bigger impact on the consumer," said Ryan Crane, senior portfolio manager at Stephens Capital Management, of Houston, Texas. "Just when we're starting to see the impact of high oil prices (on the economy), here's another ... shock to the system that could cause an even bigger problem."
The supply disruption boosted shares of oil and gas producers, while home improvement shops Home Depot Inc. (HD) and Lowe's Cos. (LOW) also got a lift as residents along the Gulf coast prepared for Katrina's approach. Home Depot rose 72 cents to $40.53, and Lowe's was up 66 cents to $63.84.
Shares of insurance companies, which could be on the hook for hefty claims, were lower. Blue-chip American International Group Inc. (AIG) fell 16 cents to $59.11 on the New York Stock Exchange. St. Paul Travelers Co. (STA) fell 71 cents to $44.03, also on the NYSE, weighing the Standard & Poor's 500 index.
Shares of gaming companies with operations in storm-affected regions were lower. Isle of Capri Casinos (ISLE), which operates riverboat casinos, were down 4.3 percent to $23.13 on the Nasdaq.
Shares of energy companies rose, with blue-chip Exxon Mobil Corp. (XOM),up 15 cents to $58.56 on the NYSE. While oil operations in the Gulf of Mexico have been interrupted by the storm, oil companies would benefit from higher oil prices.
Bonds rose while stocks declined, with the yield on the 10-year Treasury note falling to 4.15 percent from 4.19 percent on Friday. The U.S. dollar was mixed against other major currencies in European trading, while gold prices inched higher.
Elsewhere, other stocks enjoyed gains amid more corporate acquisitions. Shares of PanAmSat Holding Corp. (PA) surged on news that it agreed to be acquired by privately held Intelsat Ltd. for $3.2 billion in cash, forming the world's biggest commercial satellite fleet. The $25 per share offer is a 25 percent premium to PanAmSat's closing price of $19.80 on Friday. PanAmSat surged $4.14, or 20.9 percent, to $23.94.
Per-Se Technologies Inc. (PSTI) and Wolters Kluwer said they agreed to buy businesses of NDCHealth Corp., a maker of software for processing health-care claims and prescription data, in two separate deals totaling $700 million in cash and stock, plus the assumption of $270 million in debt. Per-Se slipped 27 cents to $19.77, while NDC added $1.04 to $18.81.
The Russell 2000 index of smaller companies slipped 2.75, or 0.42 percent, to 645.89.
Overseas, Japan's Nikkei stock average fell 1.04 percent. In afternoon trading, Britain's FTSE 100 was down 0.53 percent, Germany's DAX index dropped 0.13 percent, and France's CAC-40 rose 0.06 percent.
Reuters and the Associated Press contributed to this report.