For the first time in more than a century, weather has stopped U.S. equity trading for two straight days as Hurricane Sandy swept across New York City.
Stock trading was canceled for a second day, joining bond markets, as 90-mile-per-hour winds and surging seas paralyzed American capital markets. The shutdown, the first for consecutive days due to weather since 1888, was announced by NYSE Euronext after consultations with other exchanges. The Securities Industry and Financial Markets Association earlier recommended a full market close today in dollar-denominated fixed-income securities after they shut at noon New York time yesterday.
Hurricane Sandy, the Atlantic’s Ocean’s biggest-ever tropical storm, slammed into southern New Jersey and churned north over land. The storm, 900 miles wide, produced life- threatening surges in a region with 60 million residents and caused what may add up to billions of dollars of damage. At least 316,500 customers were without power, and thousands of securities industry employees stayed home as Sandy threatened to flood lower Manhattan, home to much of the borough’s electrical infrastructure.
“It’s an unprecedented event coordinated with an unprecedented storm,” Ryan Larson, the Chicago-based head of U.S. equity trading at RBC Global Asset Management (U.S.) Inc., said in a telephone interview. His firm oversees $250 billion in assets. “The response from the exchanges and regulators in terms of the closing of the market was certainly appropriate and remains appropriate for the exchanges to be closed tomorrow as well.”
Exchanges are planning to reopen Oct. 31, weather permitting, according to statements from NYSE Euronext and Nasdaq OMX Group Inc. The last comparable closure of the New York Stock Exchange was on March 12 and 13, 1888, when a blizzard dumped 21 inches of snow on New York, according to the company’s website. The exchange was closed for about 1 1/2 days after a snowstorm in February 1978.
CME Group Inc. opened trading of equity-index futures and options last night until 9:15 a.m. today. The NYSE and Nasdaq said all of their U.S. exchanges will close across every asset class. CME said trading of interest-rate futures and options including Treasuries, Eurodollar and Federal funds products will resume normal trading hours, including remaining open today on both the floor and the Globex platform. The CME’s Nymex floor will be closed with its products available electronically.