"Investors were clearly jolted by the impact of Hurricanes Katrina and Rita, the spiraling rebuilding costs and the implications for oil supply and distribution," says Maury Harris, UBS chief U.S. economist. "Having also lived with high energy prices this summer, investors now view rising costs as part of a longer-term trend, rather than a short-lived phenomenon."
According to the USB/Gallup survey, the great majority of investors say the current energy prices are hurting the U.S. investment climate. Fifty-four percent say the investment climate is hurt "a great deal," while 34 percent say it is hurt a "moderate amount." As compared with last year, investors now believe that the current rise in gas prices represents a more permanent trend. Seventy-one percent of investors believe the rising prices are part of a permanent trend, compared with 56 percent in May of 2004.