Hurricane Sandy shuts stock trading for 2 days

Remember when President Grover Cleveland ran for a second term or when Jack the Ripper spread terror in London or when you first read that Kaiser Wilhelm II had become German emperor?
Associated Press
Oct 29, 2012


Yes, it's been that long.

On Monday, shortly after midday, the New York Stock Exchange announced it would close stock trading for a second day Tuesday due to a once-in-a-century storm. Once in a 124-year storm is more apt. The last time trading was halted for two consecutive days due to weather was in 1888.

This time, instead of snow drifts 40-feet high, surging water threatens to crest between 6 and 11 feet. And instead of the Blizzard of 1888, it is the more benign sounding, but equally disruptive, Hurricane Sandy.

"It's a monumental event, and we take it very seriously," said Larry Liebowitz, chief operating officer of NYSE Euronext, the company that operates the New York Stock Exchange. "It's not a hyped-up drama."

Leibowitz spoke shortly at 2 p.m. EDT after a series of conference calls with stock brokerage firms, regulators and officials during which a "consensus" emerged to close markets for a second day. As for Wednesday, he said he was "hopeful" the exchange would open.

Nasdaq, another major stock exchange, said it also optimistic, too.

As the storm approached Manhattan midday Monday, water cascaded over seawalls near the iconic NYSE trading floor and a highway running along the island's East Side was flooded in parts.

Areas around New York's Financial District were part of a mandatory evacuation zone.

Inside the exchange, the lights were ablaze early Monday but, aside from security workers, few humans were present. There were no specialists on the floor matching buyers and sellers of stocks, and there were no traders.

There were more signs of life at the Duane Reade a block or so away. One man was buying candles, scented, and asking for extra matches, as another walked out clutching a 12-pack of beer.

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. Labor Department officials are still hopeful that the report can be released on time, but they acknowledge that the storm could cause a delay.

"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.

Originally, the NYSE had planned to close just its exchange floor and allow traders to buy and sell stock electronically. Then it decided to shut down electronic trading, too. The NYSE said it was worried about putting staff who were needed to help run the electronic trading in danger.

NYSE's Leibowitz said he was also worried about low trading volumes due to many investors taking the day off. The fear is that just a few trades could whip stock around like the storm outside, sending prices surging one minute or plunging the next. As automatic trading by computers has come to dominate stock trading, it was a fear voiced by other Wall Street experts.

"If you switch on the computers, they'll be trading like it's a normal day. They don't need to deal with New Jersey Transit being out," said Julian Bridgen, managing partner of Macro Intelligence 2 Partners, an investment consultancy, from his wind whipped home in Hoboken, N.J. "You could have a potent cocktail."

In commodity trading, the CME Group's New York trading floor was closed, but electronic markets were functioning. Crude oil fell 80 cents to $85.48 in electronic trading. CME said Monday that electronic trading for commodities would also be open Tuesday.

Bond trading will also be closed Tuesday.

The last time the major exchanges closed for a day due to weather was on Sept. 27, 1985, when Hurricane Gloria struck. That storm largely spared New York, however. The skies were sunny by 4 p.m., when the trading day normally ends.

European stock markets fell. France's CAC-40 fell 0.8 percent, Britain's FTSE fell 0.2 percent and Germany's DAX lost 0.4 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.

Some companies are postponing quarterly earnings reports scheduled for release early this week. So far, that includes Pfizer Inc. and Thomson Reuters.

Even with many markets shut down, there was some encouraging news about the U.S. economy Monday. 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.

Since 1885, there have been 371 emergency and celebratory closings of the NYSE, some for minutes, others for days, according to the NYSE.

Stock trading halted for two hours in May 20, 1910 for the funeral of Britain's King Edward VII. In February 1969, the exchange closed for a day because of snow. In early 1978, heavy snow forced Wall Street to suspend operations again.

Trading also has been interrupted during political crisis. Trading was halted on Nov. 22, 1963, when President John F. Kennedy was assassinated. On March 30, 1981, markets about 45 minutes early after word that President Reagan had been shot.

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




Sooo sad...:(


The exchanges seriously need to work on contingency plans. This storm only helped to illustrate major flaws.

Govt. bureaucrats and regulators like to focus on systemic risk. Here's a blatant one.


What?, we can't go a few days without Wall Street scheming???


I'd personally like to see Wall St. shut down until past the election. Let's see how the vote goes without the freakin' money.


@ OMG and lb2:

Where do you two get money to support yourselves?

The level of economic and personal financial ignorance in this country is pathetic.


From working. Not from "gambling" in the market, Contango.


@ luvblues2:

And once you get your money "from working" do you buy products and services from corps. and businesses?

And does your co. sell products or services?

Investing and speculating is NOT "gambling."

Know the difference:


Corporations go to the exchanges in order to get capital to help invest in their business so they can grow them.

The U.S. govt. goes to the exchanges to sell debt to help keep the govt. goin'.

So you think that stock market crashes are good things? Because that's what would happen (and worse) if you closed them until after the election.

As I wrote - economic and financial ignorance.


Do you honestly think you will ever get a liberal to believe they do not magically pull stuff out of a hat? Heck most of them believe everything should be free. Argueing with a obama supporter is like playing chess with a pidgeon, Try as you might they will just end up knocking all the peices over and crapping on the board.


Nothing more than I would like to see than starting over. From scratch. Bring it.


From scratch? Really? What if you could not provide a service for me to trade for my food? Will you try to force people to donate? In a barter system most would starve to death before they could learn a decent trade.


Oh please, not the barter system AGAIN! Let's keep this in the 21st century!


@ luvblues2:

So you have no retirement savings, but will attempt to 'survive' off whatever stipend the govt. decides to give you as a senior?

Why do you think that public employee (teachers, firemen, etc.) pension trusts invest in the stock and bond market?


Relax don't panic! Don't worry pooh bear, it will be open soon so you can return to ticker heaven!


Oh! Please do tell how Wall St. has not f**k'd this nation up by betting on the backs of those who work and taking their jobs away and sending them offshore?


@ luvblues2:

So all those public employee pension health and retirement trusts should sell their stock and bond investments in both domestic and foreign companies and do what with the assets?

Enjoy your tiny SS check in your old age.

By the way: Your employer bet money on you. He expects a return on his investment doesn't he?


Like I said. I hope Wall St. is closed till next Wednesday, the 7th of Nov.. I want to see the outcome.


Contango, you are the first to cry Ponzi scheme on pension and health. Then you ask me where mine will come from when Wall St. melts down? IDGAF. My employer(s) let me down long ago. I am damn tired of watching you Wall St. players playin' my cash and welfare on your "bets".


The fact of the matter is, Wall St. and all exchanges see the world as one great big horse track or Las Vegas "GRANDE".We who work, see this and know it. I for one, was hopin' for the NYSE to fall under a huge wave of buses, boats taxis' and water. Alas, it ain't gonna happen.


luvblues2 writes:

"My employer(s) let me down long ago."

Reads like an individual who thinks that they have the smarts and should go into business for themselves.

Do you not have: A bank account? Life ins.? A home mortgage? A govt.????

All of those (and more) depend on the the exchanges to function properly.

You have absolutely no (bleepin') idea what you are writing about.


Just another brilliant Occupy leftist that has no clue, Sometimes doncha wish they would just go camp out in a natural park instead of sitting downtown deprecieating building values?