Stock market to remain closed Tuesday
ASSOCIATED PRESS, STAFF REPORTS October 29, 2012 12:32PM
The floor of the New York Stock Exchange is empty of traders, Monday, Oct. 29, 2012, in New York. All major U.S. stock and options exchanges will remain closed Monday with Hurricane Sandy nearing landfall on the East Coast. Trading has rarely stopped for weather. A blizzard led to a late start and an early close on Jan. 8, 1996, according to the exchange's parent company, NYSE Euronext. The NYSE shut down on Sept. 27, 1985 for Hurricane Gloria. (AP Photo/Richard Drew)
Updated: October 29, 2012 4:42PM
Stock trading will be closed in the U.S. for a second day Tuesday as Hurricane Sandy bears down on the East Coast. Bond trading will also be closed.
The New York Stock Exchange and Nasdaq said they intend to reopen on Wednesday and would keep investors updated.
The exchange chose to close markets Monday and Tuesday because of the risks to employees.
The last time the NYSE closed for an emergency was the Sept. 11 terrorist attacks, when it remained closed for four days.
The last time the New York Stock Exchange was closed for weather was in 1985 because of Hurricane Gloria, and it will be the first time since 1888 that the exchange will have been closed for two consecutive days because of weather. The cause then was a blizzard that left drifts as high as 40 feet in the streets of New York City.
Because of the NYSE shutdown, the Chicago Board Options Exchange and some markets at the Chicago Mercantile Exchange and the Chicago Board of Trade also closed for Monday’s business.
“There’s nothing we can do,” Rick Felman, a Euro options broker with Chicago’s Bear Brokerage, said Monday morning. “It’s like the Great Flood” of the Loop in 1992.
“It costs everybody the opportunity to make money,” Felman said.
Although agriculture markets were open Monda morning, Matthew Pierce with GrainAnalyst.com, said he expected volume to be extremely low.
Much of the East Coast was at a standstill Monday as the storm approached. New York City’s mass transit system was closed down and areas around the Financial District in lower Manhattan were part of a mandatory evacuation zone. The storm surge from Sandy, which is due to make landfall later Monday, is expected to push waters into portions of lower Manhattan.
There had been plans to allow electronic trading to go forward Monday on the New York Stock Exchange, but with all mass transit shut down in and out of Manhattan, the risks were determined to be too great.
“My bias is always to keep the markets open, but this was a pretty easy decision,” Duncan Niederauer, the chief executive of the exchange’s parent company, NYSE Euronext said on CNBC. “What I underestimated ... was how much people would have to staff up if we were operating electronically.”
On Monday, the Nasdaq and the CME Group in Chicago closed. CME Group’s Nymex headquarters and New York trading floor are located in the mandatory evacuation zone in Manhattan. Its New York trading floor will be closed, but electronic markets were functioning. Crude oil fell 32 cents to $85.96 in electronic trading.
European stock markets were mostly lower. Britain’s FTSE fell 0.3 percent and France’s CAC-40 fell 0.9 percent. Insurers such as Munich Re, Aviva PLC and Zurich Insurance fared worse than other stocks as investors worried about the potential cost of the storm’s damage.
“The economic impact cannot be underestimated,” said Elsa Lignos, an analyst at RBC Capital Markets.
The uncertainty generated by the storm comes at the start of a big week in the United States. This is the last full week before next Tuesday’s presidential election and culminates Friday with the release of monthly jobs data, which many analysts think could have an impact on the vote.
“A significant swing in either direction is likely to be heavily reported in the media, potentially swinging the undecided voter,” said James Hughes, chief market analyst at Alpari, of the jobs figures.
Some companies are postponing quarterly earnings reports scheduled for release early this week. So far, that includes Pfizer Inc. and Thomson Reuters. Burger King reported on schedule, and said its third-quarter net income fell 83 percent as revenue was hurt by the stronger dollar. Adjusted results topped expectations, however.
Even though investors couldn’t do much about it, the U.S. government did report a strong increase in consumer spending last month.
The Commerce Department reported that consumer spending increased 0.8 percent in September. That followed a 0.5 percent gain in August and was the best showing since February. Personal income rose 0.4 percent, an improvement from a slight 0.1 percent gain in August and the best gain since March. It’s a closely watched indicator as consumer spending drives about 70 percent of the nation’s economic activity.
U.S. stock index futures fell slightly in thin trading. By the time trading ended at its regular time of 9:15 a.m., Dow Jones industrial average futures fell 61 points to 12,993 and S&P 500 futures fell five points to 1,402. Nasdaq futures fell 15 to 2,643.
AP Business Writer Pan Pylas contributed to this story from London.