Hurricane Sandy Keeps Markets Closed, US Stock-Index Futures Drop For Second Straight Day
Hurricane Sandy has not only caused significant property damage and the loss of life; it may also be wreaking havoc on US stock-index futures, which fell on Monday for the second straight day.
Futures trading resumed after being halted at 9:15 am yesterday. The US securities industry canceled equity trading on all markets in an attempt to protect works as the storm barred down on New York City.
According to the SFGate:
“Futures on the S&P 500 expiring in December retreated 0.6 percent from Friday’s close to 1,399.70 at 1:42 a.m. New York time. Dow Jones Industrial Average futures dropped 78 points, or 0.6 percent, to 12,976. Trading of equity-index futures and options will be halted again at 9:15 a.m.”
The losses arrive just after the Commerce Department showed consumer spending rose in September by 0.8 percent, a number higher than forecasters had predicted. Economists had believed a 0.6 percent increase would be witnessed.
Even before Hurricane Sandy arrived, the S&P 500 was struggling through a two percent decline in October as various companies reported worse than expected earnings for Q3 2012, while 72 percent of companies reported better than expected earnings.
The shutdown, which joined bond markets, is expected to reopen tomorrow, weather permitting.
Several reports claimed the New York Stock Exchange floor was submerged under water, a claim that has been called “erroneous” by exchange officials.
The last time such a back-to-back closure was witnessed because of weather was March 12 and 13, 1888. That closure occurred after 21 inches of snow hit New York City.
Not only are market futures being affected, but analysts believe the storm could cost upwards of $20 billion.
Many companies delayed their earnings announcements because of the storm. Among companies still to report are Pfizer Inc., Office Depot Inc., and Thomas Reuters Corp. among others.
On Monday Sam Stoval, S&P’s New York-based chief equity strategist, wrote:
“History says that hurricanes typically don’t trigger market declines. Equities are more likely driven by wider-reaching global events than localized natural disasters.”
Regardless of what is driving market declines, it’s simply more bad news for New York as city officials continue to deal with the effects of Hurricane Sandy.