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A few days ago we examined hurricane dean and the possibility that it could affect some stocks positively and others negatively. Hurricane Dean has now struck land twice, once on the southern side of the Yucatan peninsula in Mexico and then earlier today on the central mainland Mexican coast. What effects has it had on stocks in the United States?                      

Oil, gasoline, and natural gas prices had traded higher on Thursday and Friday in anticipation of Hurricane Dean possibly making landfall in Texas. The storm ended up moving much farther to the south than was original predicted and bringing nothing but a few showers to the far southern coastline of Texas. As a result, Monday and Tuesday were both large down days for oil, gasoline, and natural gas prices. Stocks such as Schlumberger Limited (NYSE:SLB), Baker Hughes Incorporated (NYSE: BHI), and Transocean Inc (NYSE: RIG) all underperformed the major market averages on Monday and Tuesday. The stocks had some short-term traders who had bought the stocks hoping for a quick pop from Dean if it came up through the oil rigs near the U.S. coast. Once it had become evident on Monday and Tuesday that Dean would not threaten these rigs, the stocks fell as these traders sold their positions.

On Friday, national gas prices rose in the United States as companies rose prices in anticipation of possible problems from Hurricane Dean. Since the storm has only caused some damage to oil rigs in Mexico, which are not tied closely to the price of gasoline here in the United States, the gas prices are likely to settle back down in the coming days.

The lesson from this storm is that while a trade may appear to be a great move and sure thing at the time, a hurricane turn at any time, so staying on top of the latest developments is a must for investors. The United States should be very thankful that a category five storm like Dean did not hit somewhere on the Gulf Coast in the Texas or Louisiana area, because the damage would have been tremendous.