Oil companies pulled their crews off petroleum platforms in the Gulf of Mexico today and began battening down refineries as far inland as Houston as Hurricane Rita grew into a Category 5 storm.
As the oil industry hunkered down, so did stock traders. For the third day in a row, stock prices plunged as traders tried to minimize the risk to their exposure to the unpredictable hurricane.
The Dow Jones industrial average took a 103-point hit, falling to 10,378.03 -- its lowest point since early July. The Standard & Poor's 500 stock index dropped 11 points to 1,210.20. The Nasdaq Stock Market composite index fell almost 25 points to 2,106.64.
With Rita's landfall still 48 hours away, traders are facing two more tough days, trying to assess the impact of a storm that could bring another disaster or turn out to be a near-miss.
Stocks of retail stores and consumer products companies were the day's most conspicuous losers. Investors fear consumer spending -- already crimped by record gas prices -- could be further dampened by a new deluge of disaster stories.
Petroleum traders placed their biggest bets on gasoline -- figuring that Rita's worst threat is to the Texas oil refineries that produce finished products, not to the supply of crude.
More than half the crude oil production in the Gulf is "shut in" -- as the oil men put it -- either because it hasn't been restarted since Katrina came through more than three weeks ago or because it has been closed in anticipation of Rita.
Wholesale gasoline prices jumped 8 cents a gallon to $2.06, which is still far, far below the $2.92 peak on Aug. 31 when Katrina was the cause. Wholesale prices don't include taxes, transportation or gas station profits. It's impossible at this point to calculate how much prices at the pump will rise, but the direction of the trend is obvious.
Natural gas futures hit an all time record of $13.24 per million British thermal units but fell back to $12.58 before the end of regular trading. Gas production could be hurt badly by the storm, but price moves are relatively modest, because this is the slack season; the winter heating season has yet to start, and summer demand for gas to power electric generators has fallen off.