US stock, bond markets shut, may reopen Wed.
By John McCrank and Rick Rothacker, Reuters
October 31, 2012, 12:02 am TWN
U.S. stock and bond markets will be closed on Tuesday, as Hurricane Sandy forced Wall Street to shut down trading for at least a second straight day.
NYSE Euronext and Nasdaq OMX Group said they made their decision in consultation with industry executives and regulators, and intend to reopen Wednesday, conditions permitting.
BATS Global Markets, the No. 3 U.S. stock exchange, also said it will be closed on Tuesday. BATS said it was monitoring the situation before providing an update on its Wednesday plans.
“It doesn't make sense to put people in harm's way or to only have half a market,” said Nicholas Colas, chief market strategist at ConvergEx Group in New York. “If just the electronic market was open, that wouldn't provide enough interest, with everything else still closed.”
Bond markets, which closed at noon EDT on Monday, will not reopen on Tuesday, a trade group said.
The hurricane could cost NYSE Euronext, CME Group Inc. and Nasdaq OMX Group nearly US$6 million in trading revenue each full day that stocks and bond markets are closed, Sandler O'Neill analyst Richard Repetto said.
The U.S. stock exchanges' closure on Monday for Hurricane Sandy came on the anniversary — Oct. 29 — of the 1929 stock market crash.
Equities trading executives on Monday had pressed the stock exchanges to clearly communicate their plans to avoid a repeat of Sunday night. Market participants and regulators decided late on Sunday to shut the stock and options markets for the first time due to weather in 27 years, reversing an earlier plan to keep electronic trading going on Monday, leaving some people complaining about the confusion it caused.
The biggest problem with the New York Stock Exchange's initial plan to trade exclusively over its ARCA electronic system was that the contingency plan that it had created in March had not been vetted by many brokerage firms, the sources said.
The decision on whether to keep markets closed on Tuesday comes as Hurricane Sandy began battering the U.S. East Coast on Monday with fierce winds and driving rain. The monster storm shut down transportation, shuttered businesses and sent thousands scrambling for higher ground hours before the worst was due to strike.
In New York, the mass transit system was shut down on Sunday evening, and many Wall Street employees were working from home, although major financial services firms were open for business at least with skeletal staff. Flooding is already hitting parts of Lower Manhattan and parts of New Jersey even before the storm makes landfall.
Financial companies that had flown executives into New York over the weekend for Monday meetings and conferences scrambled to find ways to keep them busy. One firm offered media interviews with portfolio managers stranded in New York after a conference they were attending was canceled.