Market analysts said despite the human drama and infrastructure devastation, the market could take solace in the fact that a massive rebuilding effort would mostly offset the negative economic consequences of the flooding.
US crude futures fell 2.5 per cent to $46.68 per barrel over concerns that the refinery shutdowns could trigger an increase in crude inventories. Gasoline prices , however, rose.
Oil majors Exxon and Chevron were down 0.3 per cent and 0.4 per cent respectively. Refiner Valero Energy climbed 1.1 per cent.
Investors sought safe-haven assets, with gold rising to its highest in nearly 10 months.
But the search for safe havens was accompanied by stock picking in Home Depot, which rose 1.2 per cent, and other companies likely to benefit from rebuilding efforts in the region.
"Home Depot will most certainly see a financial benefit from Hurricane Harvey, just as it did from Hurricane Sandy back in 2013," said Neil Saunders, managing director of GlobalData Retail.
Insurer Travelers was the largest drag on the Dow with a 2.6 per cent drop to $123.23, while Allstate fell 1.5 per cent to $90.65 as investors assessed the likely impact of Harvey on the sector.
The S&P 500 financial sector was the largest weight on the index, with a 0.5 per cent drop.
"There tends to be initially a knee-jerk reaction and people react to the human side and the energy disruption, but that eases soon," said Jim Paulsen, chief investment strategist at The Leuthold Group in Minneapolis, of the market's reaction to the major storm and its aftermath.
"This is a massive human tragedy and the worst of it may not be over yet, but as far as stock market impact I don't know if it is net-net a huge negative considering the fact it will bring in huge stimulus to the region."
The Dow Jones Industrial Average fell 5.27 points, or 0.02 per cent, to close at 21,808.4, the S&P 500 gained 1.19 points, or 0.05 per cent, to 2,444.24
The Nasdaq Composite added 17.37 points, or 0.28 per cent, to 6,283.02 helped by rises in Apple and Gilead Sciences .
Kite Pharmaceuticals surged 28.0 per cent to $178.05 after Gilead Sciences agreed to buy the immunotherapy developer in a deal valued at $11.9 billion. Shares of Gilead rose 1.2 per cent.
Expedia fell 4.5 per cent after an internal memo by the online travel services company said its CEO, Dara Khosrowshahi, has been asked to lead Uber.
Declining issues outnumbered advancing ones on the NYSE by a 1.14-to-1 ratio; on Nasdaq, a 1.02-to-1 ratio favoured decliners.
About 5.13 billion shares changed hands in US exchanges, compared with the near 6 billion daily average over the last 20 sessions.