Sandy shutters Wall St for another day

Share trading will be closed in the US for a second day as Hurricane Sandy bears down on the East Coast. Bond trading will also be closed.

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 (12 metres in the streets of New York City.

The New York Stock Exchange and Nasdaq said they intend to reopen on Wednesday and would keep investors updated.

Much of the East Coast was at a standstill on Monday (US time) as the storm approached. Mass transit and schools were closed across the region ahead of the storm hitting land, which was expected to happen later on Monday.

Areas around New York's Financial District were part of a mandatory evacuation zone. The storm surge is already pushing water over seawalls in the southern tip of Manhattan.

CME Group's New York trading floor was closed, but its electronic markets for commodities were functioning. Crude oil fell 74 cents to close at $85.54 in electronic trading. CME said electronic trading for commodities would also be open Tuesday.

CME said it would reopen its stock index futures trading Monday night at 6 p.m. ET for overnight electronic trading and keep it open through 9:15 a.m. Tuesday. Trading on interest rate futures and options on futures including Treasurys, Eurodollar and Fed Funds would reopen at the same time Monday night and stay open Tuesday.

Bond trading will be closed on Tuesday. The Securities Industry and Financial Markets Association called for an early close to bond trading on Monday, at 12 noon. The yield on the benchmark 10-year Treasury note was 1.72 per cent, compared with 1.75 per cent late on Friday.

European stock markets fell. France's CAC-40 fell 0.8 per cent, Britain's FTSE fell 0.2 per cent and Germany's DAX lost 0.4 per cent. Insurers such as Munich Re, Aviva 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 and Thomson Reuters. Burger King reported on schedule, and said its third-quarter net income fell 83 per cent as revenue was hurt by the stronger dollar. Adjusted results topped expectations, however.

Even with many markets shut down, there was some encouraging news about the US economy on Monday. The Commerce Department reported that consumer spending increased 0.8 per cent in September. That followed a 0.5 per cent gain in August and was the best showing since February.

Personal income rose 0.4 per cent, an improvement from a slight 0.1 per cent gain in August and the best gain since March. It's a closely watched indicator as consumer spending drives about 70 per cent of the nation's economic activity.

- BusinessDesk

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