Standard & Poors also warned that higher fuel prices will have a potentially serious effect on the already ailing airline industry. "Direct effects of the storm included added costs to redeploy aircraft and some loss of revenue from flight cancellations. Widespread delays earlier this week should not cause large revenue loss, since passengers had already paid for fights that, in most case, were eventually taken," said Credit Analyst Philip Baggaley. "In the longer term, if the storm and resulting higher energy prices slows economic growth and consumer spending, it will have an indirect depressing effect on air travel."
U.S. companies, including mining, are warily eying rising fuel prices that are already are hurting corporate profits. Standard & Poors advised Wednesday that "oil prices are going nowhere but up and so we believe that earnings are going to go south. It does cast a doubt over whether earnings growth for the rest of the year will be at double-digit levels."
However, CIBC World Markets told Reuters that earnings will not be hurt because reconstruction will boost profits of cement [and presumably base and industrial minerals] and building materials manufacturers.
In the meantime, it only took two days for the crooks to take advantage of the devastation left behind by Katrina. The SEC Office of Investor Education warned that scammers are already sending up e-mails promoting stocks on the basis of hurricane activity in the Gulf of New Mexico.
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