(Reuters) - Shares of U.S. insurance companies rose on Tuesday while freight companies dipped as Hurricane Dorian was forecast to come “dangerously close” to Florida’s coast but not make a direct hit.
After hovering over the Bahamas for nearly 24 hours and killing at least five people, the storm weakened and was forecast to churn towards Florida by day’s end, before bringing its powerful winds and dangerous surf along the coasts of Georgia, South Carolina and North Carolina.
Here are some stocks to keep an eye on as Hurricane Dorian menaces the U.S. East Coast:
Norwegian Cruise Line Holdings Ltd (NCLH.N), Royal Caribbean Cruises Ltd (RCL.N) and Carnival Corp (CCL.N) all fell about 2% after Dorian devastated parts of the Bahamas, a major cruise ship destination.
Climate risk consulting company Four Twenty Seven identified those cruise lines as having high relative exposure to the Florida region.
Regional property insurers with exposure to Florida rallied as it appeared the state would escape the worst of the hurricane. Heritage Insurance Holdings Inc (HRTG.N) surged 7%, HCI Group Inc (HCI.N) and United Insurance Holdings Corp (UIHC.O) both jumped 6%, and Universal Insurance Holdings Inc (UVE.N) climbed 5%.
Populations have risen along the Atlantic Coast every year since 2000, despite increasing hurricane risks, according to AIR, a catastrophic risk management company. The total insured value of residential and commercial property in Florida’s coastal counties reached $3.6 trillion last year, up from $3.2 trillion in 2015.
FREIGHT Shares of freight companies have the potential to gain after destructive hurricanes on bets they may see rising demand from businesses shipping in materials for rebuilding efforts. Some U.S. freight stocks lost ground on Tuesday after climbing on Friday, when the hurricane was viewed as a greater threat to Florida. USA Truck Inc (USAK.O) and XPO Logistics Inc (XPO.N) both declined 3%, while Old Dominion Freight Line Inc (ODFL.O) and JB Hunt Transport Services Inc (JBHT.O) fell about 2%.
Also affecting sentiment for freight stocks, data showed U.S. factory activity contracted in August for the first time since 2016, renewing fears that the U.S.-China trade war could tip the world’s largest economy into recession.
BUILDING SUPPLIES Hurricanes have had mixed effects on shares of building products. In September 2018, as Hurricane Florence approached North Carolina, shares of roofing and insulation companies rose while shares of cement companies fell. On Tuesday, shares of building supply companies, including Owens Corning (OC.N), Summit Materials Inc (SUM.N), Martin Marietta Materials Inc (MLM.N) and Vulcan Materials Co (VMC.N), were mixed.
Shares of Lowe’s Companies Inc (LOW.N) were down 0.4% and Home Depot Inc (HD.N) slipped 1.4% on Tuesday. Their stocks have benefited in the wake of previous hurricanes as homeowners made purchases to repair damage.
Shares of hotel operators have gained following previous hurricanes as demand from people displaced by hurricanes outweighed the hit from declines in tourism.
NextEra Energy Inc (NEE.N), the parent company of Florida Power & Light Co, jumped 2.7%.
(GRAPHIC: Stocks to watch as Dorian nears the U.S. East Coast - here
Reporting by Noel Randewich; Editing by Lisa Shumaker