Tech, insurers lead Wall Street rally as Irma, N.Korea fears ease

All the 11 major S&P indexes were higher, with the technology and the financial sectors' more than 1 percent rise leading the gainers.
All the 11 major S&P indexes were higher, with the technology and the financial sectors' more than 1 percent rise leading the gainers.PHOTO: AFP

NEW YORK (REUTERS) - Wall Street was sharply higher on Monday (Sept 11) morning in a broad rally led by technology and financial stocks, especially insurers, on relief that Irma weakened to a tropical storm and North Korea did not conduct a nuclear test as feared.

Irma pounded heavily populated areas of central Florida over the weekend, but gradually lost strength and was downgraded to a tropical storm in the morning.

Irma had started off a category 5 hurricane and was once ranked as one of the most powerful recorded in the Atlantic. It came on the heels of Hurricane Harvey, whose devastations economists said would dent third-quarter economic growth.

Also boosting risk appetite was North Korea holding a massive celebration on it founding day on Saturday, instead of another long-range missile launch as the United States and its allies were bracing for.

With the tensions easing, world stocks climbed to a record high, while the dollar edged higher and gold retreated from Friday's 13-month high. "For now, we're seeing a bit of a relief rally. It does appear that the worst-case scenario for Florida has been evaded," said Peter Cardillo, chief market economist at First Standard Financial in New York.

At 9:37 a.m. ET (9:37 p.m. Singapore time), the Dow Jones Industrial Average was up 172.84 points, or 0.79 per cent, at 21,970.63 and the S&P 500 was up 17.64 points, or 0.72 per cent, at 2,479.07. The Nasdaq Composite was up 63.32 points, or 1 per cent, at 6,423.51. "However, a big question remains on the sanctions from the United Nations ... you just have to wait and see the reaction from North Korea," Mr Cardillo said.

The U.N. Security Council is set to vote on Monday on a watered-down US-drafted resolution to impose new sanctions on North Korea over its latest nuclear test, diplomats said.

All the 11 major S&P indexes were higher, with the technology and the financial sectors' more than 1 percent rise leading the gainers.

Shares of insurers, which had been under pressure after the back-to-back natural disasters, gained. Allstate and Chubb were up about 3 pe rcent. Travelers jumped about 3.5 per cent, leading the Dow higher.

Florida insurers gained more. Universal Insurance Holdings , Heritage Insurance and HCI Group all surged about 15 per cent.

Apple rose 1.5 per cent to $161.07, giving the biggest boost to the S&P and the Nasdaq, a day ahead of the expected launch of its new iPhone.