As the thunderous punch of Hurricane Katrina continued to spread misery across the Gulf Coast on Thursday, Wall Street began the cold calculus of identifying companies and industries that might suffer in the storm's wake and those that might benefit.
Analysts concluded that among the hardest hit may be hospital chains, retail stores and gambling firms that operate in the area and airlines and automakers hit by rising fuel prices.
The list of possible beneficiaries includes rail companies that could take over disrupted Mississippi barge shipments; oil and gas companies benefiting from soaring prices; home repair, construction and waste cleanup firms; and even insurance carriers that may be able to raise rates once the cleanup is finished.
While lamenting the incalculable cost in lives and the staggering level of wealth destruction, many, though certainly not all, Wall Street analysts said that they did not think the hurricane would derail the economy and that the recovery effort will eventually pump enormous public and private capital into the devastated area, boosting incomes and growth.
That attitude has been reflected in market activity this week. The broad Standard & Poor's 500-stock index has risen 1.4 percent the past four days, closing up slightly on Thursday at 1221.59. The Dow Jones industrial average closed at 10,459.63 on Thursday, down 21.97 points for the day, or 0.2 percent. The Nasdaq composite index dropped 4.19 points, or 0.2 percent, to close at 2147.90. But both the Dow and the Nasdaq are still up for the week.
"This is a terrible, terrible catastrophe, but out of catastrophe tends to come human resolve to rebuild, and to rebuild to a higher standard," said Neil Hennessy, portfolio manager of Hennessy Funds.
The stock market's resilience this week has been driven in large part by energy companies that stand to benefit from oil and gas price spikes. Exxon Mobil has been the second-best performer in the Dow this week, up $3.27, or nearly 6 percent. Sunoco on Thursday gained $5.34, or 7.4 percent, to close at $78.04. Even firms with major assets in the Gulf of Mexico, such as Marathon Oil and Chevron, have seen their shares rise all week.
In a research report, Citigroup said Amerada Hess and Occidental Petroleum could benefit most from a supply disruption because they have the least exposure to Katrina's rampage. Amerada Hess rose $7.17, or 5.6 percent, on Thursday to close at $134.27. Occidental rose $1.77, or 2.1 percent, to $84.80 on Thursday.
Companies involved in construction and home repair have also risen in the storm's wake. For the week, heavy equipment maker Caterpillar is up $3.45, or 6.4 percent, to $56.94. Home Depot is up 80 cents, or 2 percent, to $40.61 this week. Smaller names such as timber supplier Rayonier and Beacon Roofing Supply have also gained.
"Everyone thinks about all the negative impact of an event like this," said Scott Merritt, equity strategist at J.P. Morgan Asset Management. "But think of all the builders and suppliers that come in. Think of all the insurance policies that get written once the cleanup is over. A lot of capital gets pumped into a disaster area, and that can be stimulative in ways that are quite surprising."
That rosy outlook is not universal, however. Several analysts warned that the market could be underestimating Katrina's potential impact. "The expected economic bounce from rebuilding will be much delayed, deepening the impact of the storm," University of Maryland professor Peter Morici said in a report.
Fear of lasting devastation to the area has taken a toll on the stocks of companies such as Wal-Mart and McDonald's with a major presence along the gulf. High fuel prices have also hurt airlines and big automakers, especially those that produce large numbers of gas-hungry sport-utility vehicles, such as General Motors.
Some analysts said firms such as Waste Management and Allied Waste Industries could benefit from the cleanup effort, though they added that higher costs for the firms and federal limits on the amounts they can charge after a natural disaster could limit gains.
Among railroad companies, J.P. Morgan said in a report, Burlington Northern Santa Fe could benefit from taking over the transport of grain that would otherwise travel by barge down the Mississippi. J.P. Morgan said the grain could instead be routed by rail to ports in Texas or the Pacific Northwest.
Staff researcher Richard Drezen contributed to this report.
New York Stock Exchange composite index rose 47.76, to 7543.85.
American Stock Exchange index rose 25.40, to 1681.35.
Russell 2000 index of smaller-company stocks rose 1.94, to 668.45.
NYSE: 2.24 billion shares, down from 2.36 billion on Wednesday. Advancers outnumbered decliners 11 to 7.
Nasdaq: 1.64 billion shares, down from 1.68 billion. Advancers narrowly outnumbered decliners.
Crude oil for October delivery: $69.47, up 53 cents.
Gold for current delivery: $442.30 a troy ounce, up from $433.80 on Wednesday.