(The Wall Street Journal)

With Tropical Storm Chris moving its way through the Atlantic, it could be time for investors to think again about hurricane-proofing their portfolios.

The stock market was surprisingly resilient last year after Hurricane Katrina hit Louisiana, Mississippi and Alabama. During the high-storm season from August through September, the Dow Jones Industrial Average fell 0.7 percent, compared with an average 1.8 percent drop in that period during the past 25 years.

The economy could prove naysayers wrong yet again, but some analysts say a big storm that disrupts the nation's energy supplies this year could play out differently.

Oil prices are already at levels that seemed unthinkable a couple of years ago. Damage to the nation's energy infrastructure would likely send them higher still, potentially squeezing profits at the many companies that depend on oil and gas to run their plants, fuel their planes or light their offices.

Meanwhile, the economy, slowing after more than two years of interest-rate increases and a cooling housing market, seems more vulnerable to a hurricane-induced energy shock.

"The market is poised to send oil prices skyrocketing if there is any impact on supplies from a hurricane, and I don't think the economy would digest that very well," said Mark Zandi, chief economist of the Web site Moody's Economy.com.

For investors, there are potential investing beneficiaries if a storm hits ? the energy companies themselves ? and losers ? like airlines and discount retailers. Other stocks, like property and casualty insurers and reinsurers, are a mixed bag; they run the risk of having to make huge payments to policyholders after a storm but typically get some money back by raising premiums.

Moody's Economy.com estimates that oil prices could surge to more than $100 a barrel from the current $75.81 and gasoline could top $4 a gallon if a hurricane the size of Katrina hits key energy facilities in the Gulf of Mexico again.

Jeffrey Kleintop, chief investment strategist at PNC Wealth Management, says investors looking to hedge against the risk of a hurricane should invest in energy stocks or energy-related exchange-traded funds, such as the Vanguard Energy Vipers, which gained 13 percent from last August through September.

Six of the 10 best-performing stocks among larger companies in that period last year were energy companies, including Valero Energy Corp., which rose 37 percent, and TXU Corp., up 30 percent. Both also surged during this stretch in 2004, another active storm season.

Another way to hedge against an oil shock: clean-energy investments ? such as the New Alternatives Fund, a Melville, New York, mutual fund, or PowerShares WilderHill Clean Energy ETF ? which tend to rally when oil prices surge. Last summer, the PowerShares ETF rose more than 10 percent from early August through September as hurricanes Katrina and Rita struck the Gulf Coast, helped by stocks such as Ballard Power Systems Inc., a fuel-cell producer, and Active Power Inc., which supplies utilities for outages. The ETF rose 2.2 percent on Wednesday.

Owen Fitzpatrick, managing director of Deutsche Bank Private Wealth Management, says the past is a good guide to companies that might suffer from a repeat of severe storms. With their jet-fuel costs soaring last year, airline stocks tanked. Shares of JetBlue Airways and Continental Airlines, for instance, fell 16 percent and 39 percent, respectively. Delta Air Lines and Northwest Airlines, already reeling, filed for bankruptcy-law protection during that stretch.

Discount retailers like Wal-Mart Stores Inc. are vulnerable, since their low-income customers suffer most when energy costs rise. Wal-Mart shed about 10 percent in the August-September period last year, and other retailers such as Gap Inc., J.C. Penney Co. and Limited Brands Inc. tumbled more than 15 percent.

Auto makers are an indirect play on hurricanes. US car makers General Motors Corp. and Ford Motor Co. suffered as oil prices soared and sales prospects for gas-guzzling sport-utility vehicles fizzled last year. On the other hand, shares of Toyota Motor Corp., which leads in making fuel-efficient smaller cars, rose 22 percent.

Of course, many of today's hurricane fears are already priced into the stock market. If Chris doesn't develop into a severe storm and the US slips through the next couple of months without a major hit, the market could be primed to rally.

Some investors, including Warren Buffett, are already betting that way, taking a gamble that last year's catastrophic hurricane season was an aberration. Insurance brokers say Mr. Buffett's Berkshire Hathaway Inc. has been aggressively writing reinsurance policies ? insurance for insurance companies ? and commanding steep premiums in the process, hoping to cash in if a big disaster doesn't strike.

Some money managers are following his lead. In December, for instance, Waddell & Reed Advisors Core Investment Fund purchased 1.5 million shares of Ace Ltd., a Bermuda insurer that specialises in reinsurance.

"Statistically, I'd say the chance (of a repeat of the 2005 hurricane season) is pretty low," says Laurian Lytle, an investment analyst at Waddell & Reed.

The National Oceanic and Atmospheric Administration predicts that as many as 16 tropical storms might form over the Atlantic this summer, 10 of which could become full-fledged hurricanes. That would be a lot by historical standards but still less than last year, when 27 named storms formed in the Atlantic.

Energy producers have been building supplies rapidly, pushing crude-oil inventories to an eight-year high. If they aren't tapped after a storm, they could flood the market. Oil prices could fall as much as $15 a barrel if the season is benign, says PNC's Mr. Kleintop, a move he says could help trigger a fourth-quarter stock rally.

David Kotok, president of Cumberland Advisors in Vineland, New Jersey, is factoring in storms in another way. As Hurricane Katrina barrelled into the Gulf last August, his team unloaded municipal bonds exposed in Louisiana and Mississippi. Now he is considering re-entering the market in Mississippi, where reconstruction efforts seem more advanced than in Louisiana and where muni bonds offer a yield premium of nearly one-third of a percentage point over average muni bonds.