U.S. stock futures drop as East Coast braces for Hurricane Sandy
U.S. STOCKS FELL as Hurricane Sandy prevented equity markets from opening.
BLOOMBERG FILE PHOTO/TIM BOYLE
By Sarah Jones Bloomberg News
NEW YORK - U.S. stock-index futures fell as Hurricane Sandy headed toward the East Coast, preventing equity markets from opening.
Allstate Corp., the largest publicly traded U.S. home and auto insurer, slid 0.7 percent in German trading. Travelers Cos., the only insurer in the Dow Jones Industrial Average, dropped 0.9 percent.
Futures on the Standard & Poor’s 500 Index expiring in December retreated 0.7 percent to 1,397.4 at 7:19 a.m. in New York. Dow futures dropped 94 points, or 0.7 percent, to 12,960.
The U.S. securities industry canceled equity trading on all markets today, moving to protect workers, as Sandy moved toward New York City with wind speeds up to 85 miles (140 kilometers) per hour and the threat of an 11-foot (3 meter) sea surge. CME Group Inc. said it will halt stock-index futures and options at 9:15 a.m. New York time.
“There will probably be an economic impact if Sandy does hit land at hurricane force,” said Jeremy Batstone-Carr, head of research at Charles Stanley Group Plc in London. “It is also probably one of the reasons why the insurance sector is under a little pressure today.”
The trading shutdown, announced by the Securities and Exchange Commission, may extend through to tomorrow. The last time the New York Stock Exchange cut trading hours for weather was on Jan. 8, 1996, when a blizzard dropped more than 20 inches on New York City.
Markets have not closed for four days in a row since the start of 2007 when, following a weekend and the New Year’s Day holiday on a Monday, they shut on Jan. 2 to observe a day of mourning for President Gerald Ford’s death the previous week.
Exchanges from the New York Stock Exchange and Nasdaq Stock Market to those run by Direct Edge Holdings LLC in Jersey City, New Jersey, and Bats Global Markets Inc. in Lenexa, Kansas, will suspend operations. U.S. equity trading is spread across 13 exchanges and dozens of private venues run by brokerages.
NYSE Euronext and Nasdaq OMX Group Inc. said the suspension would last through tomorrow, “pending confirmation,” according to e-mailed statements. The Securities and Exchange Commission will stay in communication with the markets as the situation warrants, said John Nester, a spokesman for the SEC in Washington.
The S&P 500 has slumped 2 percent in October, as companies from Dupont Co. to Microsoft Corp. reported earnings results that disappointed investors. Third-quarter earnings at 72 percent of the gauge’s companies that have reported so far beat estimates, according to data compiled by Bloomberg. Sales missed forecasts at 59 percent of companies, the data showed.
The jobless rate probably rose in October as U.S. employers kept a tight rein on payrolls with the nation closing in on the so-called fiscal cliff, economists said before a report on Nov. 2. The fiscal cliff refers to more than $600 billion in tax increases and spending cuts that will take effect in 2013 unless Congress can reach a budget compromise.
“I am not entirely convinced we will see the typical year- end rally,” said Batstone-Carr. “Until the U.S. fiscal cliff negotiations come to some sort of conclusion, why take on the risk?”
Allstate fell 0.7 percent to $39.87 and Travelers declined 0.9 percent to $70.94 in German trading today.
NYSE Euronext, the operator of the New York Stock Exchange, slid 2.1 percent to $24.31 in Europe. Nasdaq OMX dropped 1.4 percent to $23.44.
Freeport-McMoRan Copper & Gold Inc., the world’s biggest publicly traded copper producer, declined 1.2 percent to $38.61 as copper retreated 1.2 percent on the London Metal Exchange.