How are investment professionals reacting to Katrina? We talked to a few, looking for guru guidance.

In a notable departure from the consensus, Jim Glassman of J.P. Morgan Securities has lowered his estimate of fourth-quarter GDP growth – drastically. While he had been looking for expansion in the fourth quarter of about 4% annually, now he thinks the quarter might actually be flat. The recent report from the Congressional Budget Office pegged the impact at only 0.5% to 1% for the second half.

Mr. Glassman, who is a senior policy strategist for his firm, says the consumer was already struggling with rising gasoline prices and the storm’s damage exacerbated a slowdown already under way.

That’s not to underplay the impact of Katrina.

“We’ve never seen anything quite like this. Normally, natural disasters don’t shut the economy down. You rarely see a GDP effect that lasts more than a few weeks. In this case, there were an awful lot of jobs destroyed. The impact was obviously the worst in the New Orleans area, but it will be felt everywhere.”

Mr. Glassman sides with those who think the Fed might forego raising rates at their meeting on September 20. Rates have already increased substantially. Like investors, the Fed might want to take a breather until the extent of the storm’s damage is better known.

A recent poll of economists by Bloomberg News and comments by two Fed committee members indicate widespread anticipation of another quarter-point rate hike. Anything short of that increase would be a surprise.

A well-known strategist-turned-hedge fund manager, Chuck Clough, agrees that Katrina “exacerbated tensions that were already building.” His primary concerns are the longer-term constraints imposed by the damage to the Port of New Orleans and the havoc the storm may have wrought on offshore natural gas production.

The country’s ability to export grain and cotton, among other commodities, has been compromised, for the near future at least. Efforts to repair the port are under way, but the evacuation of a large part of the area’s population and destruction of residential communities could hamper recovery.

In response, Mr. Clough has beefed up holdings of companies in Canada and Brazil, which may be able to step into the breach. Brazilian investments include the ADRs of Cia Vale do Rio Doce, which he describes as a major iron ore producer, and Empresa Brasileira de Aeronautica, a jet manufacturer.

Another approach would be to buy an exchange-traded fund such as that listed on the AMEX under the symbol ^EWZ, which reflects investments in the MSCI Brazil index. This ETF is up 8.5% over the past couple of weeks.

Mr. Clough also likes natural gas producers. He points out that onshore natural gas output is in a long-term decline. Increased offshore production in the Gulf of Mexico, and especially deep-water production, is increasingly essential to maintaining American supplies. Disruptions in the Gulf will keep prices high.

Mr. Clough likes Chesapeake Energy (CHK $33.09) but acknowledges that the shares have already had a good run. They are up about 21% since August 22,the Monday before the storm hit. He also likes Western Gas Resources (WGR $47.80), which is only up about 5% over the same period.

The chairman of the management committee of Cumberland Associates, Bruce Wilcox, doesn’t normally make sweeping changes in his portfolios in response to events, and professes to some inhibitions about trying to take advantage of the misery the storm has produced.

Nonetheless, he did join those who pounced on the home-building and supply stocks, anticipating a surge in rebuilding. One such is Mohawk Industries (MHK $85),which is a major producer of tile and flooring products. The stock is up about 1.5% since before the storm.

A related stock in this arena is Hughes Supply (HUG $33), a major distributor of construction equipment in the Southeast and Southwest. The stock was trading around $28 the week before hurricane and has climbed more than 15% since.

Mr. Wilcox is not as sanguine about the energy sector. He describes the spiking in energy prices as having the feel of a “culminating event.” The group has enjoyed excellent performance, benefiting from an unusual confluence of positive news.

On the other hand, he has been taking advantage of some choppy trading in financial stocks. Like Mr. Glassman, Mr. Wilcox thinks the Fed may be less aggressive about raising rates in the near term, which could give financials a boost. He is also tempted by insurance stocks. Companies like Allstate (ALL $56) were hit by concerns over liability exposure, but history has shown that insurance rates begin to rise in the aftermath of a disaster, setting the stage for a good earnings cycle.

As he says, “Reactions to this sort of event are well-schooled. One is to buy insurers on disaster news.” Let’s fervently hope there are no refresher courses coming anytime soon.

[Mrs. Peek is an investor with both Mr. Clough and Mr. Wilcox.]