Hong Kong’s Hang Seng Index HSI, -0.35% led the region’s increases, rising 0.4%, as it played catch-up after being shut the previous session from Typhoon Hato, in the market’s first full-day trading suspension due to weather since October.
Concerns about the Trump administration’s ability to deliver on its agenda heightened further overnight after President Donald Trump threatened to shut down the government to secure funding for a Mexico border wall. That put pressure on buying interest.
Still, a slight recovery in the U.S. dollar from overnight weakness — and investor focus on the annual Jackson Hole, Wyo., symposium due to start later in the global day — gave some support to equity prices.
“Markets are hoping for a change in sentiment that can take us off the recent risk-off mode,” said Michala Marcussen, global head of economics at Société Générale, although she didn’t think the summit would provide this.
Elsewhere in the region, South Korea’s Kospi SEU, -1.16% rose 0.4%, Taiwan’s Taiex Y9999, -0.39% gained 0.8%, while Australia’s S&P/ASX 200 XJO, -0.89% reversed early weakness to end up 0.1%, lifted by gains in mining stocks.
Among large Australian mining companies, Rio Tinto RIO, -0.41% and BHP Billiton BHP, -0.41% gained 3.1% and 2.2%.
Meanwhile, Japan’s Nikkei Stock Average NIK, -0.61% fell 0.4% despite the U.S. dollar’s USDJPY, -0.45% recovery against the yen in Asian trade. The dollar was last at ¥109.19, up 0.2%.
The Shanghai Composite Index SHCOMP, +0.14% fell 0.5%.
In Hong Kong, Macau-related casino stocks were broadly lower, as Typhoon Hato’s direct hit on the gambling hub led to flooding and widespread power outages, disrupting operations at many casinos and hotels.
As the operators assess the full extent of damages, SJM Holdings 0880, +1.96% was off 1.5%, while Sands China 1928, +2.05% fell 1.1% and Galaxy Entertainment 0027, +2.15% declined 0.6%.
Among other commodities, oil prices managed to hold on to their 1% gains from overnight as U.S. data showed that supplies fell. Nymex crude and Brent futures were both down 8 U.S. cents at $48.33 and $52.49 a barrel each in Asian trade.
In the debt market, investors were also sitting on the sidelines ahead of the Jackson Hole gathering. Japan’s newest 20-year tenor’s yield was recently a bit higher at 0.545% while the 30-year note was down slightly at 0.82%.
Trading was closed on the FTSE 100 UKX, -0.08% as the U.K. observed the August Bank Holiday, meaning trading volumes were lighter than usual.
The Stoxx Europe 600 index SXXP, -0.48% fell 0.5% to 372.29, near session lows. The pan-European index on Friday ended the session 0.1% lower and finished the week down by less than 0.1%.
Euro gain: Shares of exporters across Europe were pushed lower as the euro EURUSD, -0.0668% held on to the higher ground it reached after a speech by European Central Bank President Mario Draghi in Jackson Hole, Wyo., on Friday.
Read: Recap of the Jackson Hole symposium coverage
Among big exporting names, shares of German auto makers BMW BMW, -0.08% and Daimler AG DAI, -0.32% both fell by about 0.2%, and French beauty products maker L’Oréal SA OR, -0.42% lost 0.4%.
Euro strength can hurt shares of exporters because it can erode revenue made overseas.
The shared currency pushed to its highest level in 2½ years after Draghi’s appearance at the meeting of global central bankers. The euro hit an intraday high of $1.1974 on Monday, its strongest level since January 2015, according to FactSet data, and made a similar move on Friday.
“Draghi didn’t repress the euro bulls at his Jackson Hole speech on Friday,” said Ipek Ozkardeskaya, senior market analyst at London Capital Group. “This has been perceived as a green light for speculation that the ECB may announce the much-expected quantitative easing tapering plans [at the bank’s] September 7 policy meeting.”
“The bias is positive” she said in her note. “Leveraged funds more than doubled their net positive euro positions last week.”
The shared currency during Monday afternoon European trade flirted with $1.20, compared with $1.1924 late Friday in New York.
Harvey hits: The Stoxx Europe 600 Oil & Gas Index SXEP, -0.44% shed 0.4% as energy companies and investors assessed the impact of Hurricane Harvey. Shares of French oil producer Total SA FP, -0.44% were down 0.4%.
Harvey, now downgraded to a tropical storm, left widespread damage in Texas after making landfall, knocking nearly 15% of U.S. refinery capacity out of commission. The heavy flooding it’s caused could crimp even more of the country’s energy infrastructure.
“It’s bearish for crude oil and bullish for gasoline,” Barnabas Gan, an analyst at OCBC in Singapore, told The Wall Street Journal.
U.S. gasoline futures RBU7, +1.55% shot up 4% on Monday while U.S. benchmark West Texas Intermediate crude futures CLV7, +0.54% slid more than 1% to trade below $48 a barrel.
Read: Why oil prices are sinking as gasoline soars after Harvey
Stock movers: Altice NV ATC, +1.29% shares tacked on 1.3% after the telecommunications conglomerate said it would buy back up to 1 billion euros in shares through Aug. 31, 2018.
“Going forward, Altice will continue to assess the use of excess cash for either significantly accretive M&A opportunities or further shareholder returns,” Altice said in a statement.
SGL Carbon SE shares SGL, +5.75% leapt 3.4% after J.P. Morgan raised its rating on the carbon-fiber producer to overweight from neutral. “The group is now firmly on the road to recovery given the disposal of the loss-making Performance Products division and the elimination of the group’s excessive debt burden,” said J.P. Morgan analysts.
Indexes: Germany’s DAX 30 index DAX, -0.37% fell 0.4% at 12,123.47 and France’s CAC 30 index PX1, -0.48% gave up 0.5% at 5,079.75. Spain’s IBEX 35 IBEX, -0.57% ended down 0.6% at 10,285.90.
—Mark DeCambre contributed to this article
The Dow Jones Industrial Average DJIA, -0.02% declined 5.27 points, or less than 0.1%, to finish at 21,808.40. Insurance company Travelers Cos. Inc. TRV, -2.56% led losses, down 2.6%, and Goldman Sachs Group Inc. GS, -0.95% shares fell 1%. Home Depot Inc. HD, +1.16% and Apple Inc. AAPL, +1.01% led gainers, up 1.2% and 1%, respectively.
The S&P 500 index SPX, +0.05% which had traded off between slight gains and losses, closed up 1.19 points at 2,444.24, with six of the main sectors trading higher. Health-care stocks led gainers with a 0.6% advance, and tech rose 0.3%. Energy and financial stocks both finished down 0.5%.
Meanwhile, the Nasdaq Composite Index COMP, +0.28% rose 17.37 points, or 0.3%, to close at 6,283.02, driven by gains in technology and biotech names.
“Health care shares were up because of merger deals, but insurance companies are suffering because it’s clear that the flooding damage in Texas will mean a lot of claims for payouts. It is unclear if a jump in gasoline prices is long-lasting because we don’t know how soon refineries will be up and running,” said Mark Kepner, managing director of sales and trading at Themis Trading.
Shares of insurance companies were some of the worst hit on Monday, with the iShares U.S. Insurance exchange-traded fund IAK, -1.04% falling 1%.
Kepner also said low volumes tend to exaggerate price swings on Wall Street.
At the close, 2.61 billion shares changed hands on the New York Stock Exchange, with 1.54 billion trading on the Nasdaq. Trading volumes were especially light last week, coming in below already seasonally low August averages. Daily average trading volume in August for the NYSE stands at 3.09 billion shares and 1.79 billion shares for the Nasdaq, according to Dow Jones data.
“Unless we hit some macro[economic] issues, we’re in a little bit of a lull,” said Diane Jaffee, senior portfolio manager at TCW, in an interview. “Earnings are still lending strength to the overall tone of the market, and people were thinking something would come out of Jackson Hole but nothing happened, so it’s business as usual.”
Jaffee said attention is more focused on company specifics, such as Gilead Sciences Inc. GILD, +1.22% right now, rather than on macro issues. Although, if disappointing employment figures are released by the Labor Department on Friday, that is likely to boost trading volume in a negative way, she said.
Gilead shares rose 1.2% following a Wall Street Journal report that the company will buy Kite Pharma Inc. KITE, +28.00% for about $11 billion. Kite shares jumped 28%.
Read: Like Amazon, these 7 stocks have dropped 10% or more in a month—and analysts say buy them too
Biotechnology stocks fared well Monday, with the iShares Nasdaq Biotechnology ETF IBB, +1.88% trading 1.9% higher.
Now a tropical storm, Harvey devastated Houston, the fourth-largest city in the U.S., leaving its citizens grappling with unprecedented flooding. The National Weather Service warned that rainfall may exceed a record-breaking 50 inches in areas around Houston.
The storm, which was moving toward Louisiana on Monday, knocked out almost 15% of the nation’s fuel-making capacity and further disruptions were anticipated. The coast of Texas hosts nearly 30% of U.S. refining capacity, and Houston-area plants account for roughly half of that.
Read: Why oil prices are sinking as gasoline soars after Harvey
That led to U.S. gasoline futures jumping on Monday. On the New York Mercantile Exchange, September futures RBU7, +1.55% settled up 2.7% higher at $1.712 a gallon.
However, oil prices continued to decline. West Texas Intermediate oil futures CLV7, +0.54% fell 2.7% to settle at $46.57 a barrel. The most popular ETF tracking oil prices, United States Oil Fund, USO, -2.26% slumped 2.3%.
Shares of energy companies were also falling, as some major companies closed down refineries in Texas due to flooding. The SPDR Energy Select Sector exchange-traded fund XLE, -0.44% fell 0.4%.
Exxon Mobil Corp. XOM, -0.33% shut its Baytown refinery — the second largest in the U.S. — in a Houston suburb because of the heavy floodwaters, and Royal Dutch Shell PLC RDS.B, -0.19% said it stopped making fuel at its Deer Park, Texas, plant. Exxon shares fell 0.4%, while Chevron Corp. CVX, -0.43% shares were also down 0.4%.
“Although the full impact of the storm’s damage is yet to be determined, the markets expect the impact will be felt globally and affect energy markets for many weeks,” analysts at FxPro said Monday. “Following Hurricane Katrina in 2005, U.S. economic growth dropped by 50% in a quarter, therefore markets will be closely watching the damage from Harvey and its effect on the U.S. economy.”
Read: Insurance industry to easily absorb losses from Harvey, experts say
Economic data: The Commerce Department’s report showed that the advanced trade gap in goods — services are excluded — widened by 1.8% to $ 65.1 billion in July. Both exports and imports declined, but exports dropped at a faster pace in the month. The gap was wider than expected.
Corporates: Shares of Expedia Inc. EXPE, -4.51% closed down 4.5% after news that Chief Executive Dara Khosrowshahi is leaving the company to become Uber’s CEO.
Shares of Chesapeake Energy Corp. CHK, -3.69% fell 3.7%, leading the S&P 500 index lower as energy shares were battered.
Read: These 15 energy stocks are down more than 3.5% in the wake of Hurricane Harvey
Biogen Inc. BIIB, +2.54% shares advanced 2.5% following results from an Alzheimer’s drug study.
Other markets: Gold prices GCZ7, +0.56% settled up 1.3% at $1,315.30 an ounce.
The ICE Dollar Index DXY, +0.03% rose less than 0.1% to 92.26 after the greenback had earlier lost ground against the yen, the euro and pound.
In Asia, Hong Kong’s Hang Seng Index HSI, -0.39% edged up 0.1% while the Japan’s Nikkei Average NIK, -0.61% ended fractionally lower. European equities SXXP, -0.48% closed lower as the euro EURUSD, -0.0668% hit its highest against the dollar in more than two years.
Trading in the U.K. was closed for the August bank holiday.
—Carla Mozee in London contributed to this article.