NEW YORK - The U.S. stock market was closed for a second straight day on Tuesday as cash equity trading was cancelled in the wake of Hurricane Sandy.
Tuesday’s shutdown was the first time weather had resulted in a two-day market shutdown since the Great Blizzard of 1888. Exchanges expect to reopen on Wednesday. NYSE Euronext said the New York Stock Exchange would open, although it will switch to fully electronic trading if necessary.
Nasdaq OMX’s Nasdaq Stock Market will also be operating on Wednesday, a source familiar with the matter said.
Index futures stopped trading electronically at 9:15 a.m. on Tuesday (1315 GMT) and ended the session largely flat. S&P index futures ended 0.2% higher.
Futures will reopen at 7 p.m. ET (2300 GMT) for the overnight session during European and Asian hours, closing again at 9:15 a.m. Wednesday morning. Sandy, a mammoth storm, slammed into a large swathe of the densely populated U.S. eastern seaboard on Monday, forcing hundreds of thousands to seek higher ground, halting public transport and closing schools, businesses, financial markets and government departments. At least 18 people died and more than eight million homes and businesses were without power.
Investors expect heightened volatility when markets do reopen as the two-day closure creates pent-up demand.
Certain sectors are seen as especially tied to the fallout from the storm, which caused major flooding from storm surge during high tides, along with extensive damage from high winds and lashing rain.
Disaster-modelling company Eqecat estimates Sandy caused between $10 billion US and $20 billion in total economic damages, with $5 billion to $10 billion in insured losses.
Construction sectors as well as retailers such as Home Depot may see a boost from the eventual rebuilding effort, though airlines, which were forced to cancel thousands of flights, could see sharp falls. Insurance companies will also be in focus.
“With winds 75 miles per hour along with flooding in the most populated area of the country, you could have an unparalleled loss picture for insurance companies,” said Joe Heider, a Cleveland based wealth manager at Rehmann.
Compounding the issue, Sandy arrived in the middle of the corporate earnings season. While some companies, including Pfizer Inc, delayed releasing their results until the storm passed, others released theirs on schedule, including Ford Motor and TD Ameritrade.
With their results out but investors unable to trade on them, those stocks may see particular interest on Wednesday.