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Wall Street Reopens; Trading Is Flat | |
(about 1 hour later) | |
After a historic two-day closing spurred when Hurricane Sandy flooded Lower Manhattan and knocked out its power and public transit, Wall Street reopened Wednesday with slight gains in stock prices. | After a historic two-day closing spurred when Hurricane Sandy flooded Lower Manhattan and knocked out its power and public transit, Wall Street reopened Wednesday with slight gains in stock prices. |
Trading was expected to be volatile following the first multiple-day closing of the stock market since 1888 for weather-related reasons. The mayor of New York City, Michael R. Bloomberg, rang the opening bell at the New York Stock Exchange, which was running on generator power. | |
Travel into and around New York City remained limited, and wide-scale power failures meant many would be unable to work even from home. | Travel into and around New York City remained limited, and wide-scale power failures meant many would be unable to work even from home. |
By midday, the Dow Jones industrial average had turned negative by a handful of points. The Standard & Poor’s 500-stock index also moved from a gain to a small loss, and the Nasdaq composite index fell 0.5 percent. | |
Some analysts said an overreaction and higher-than-normal volume was possible as a result of pent-up demand. The two-day shutdown came during the busy corporate earnings season and at the end of the fiscal year for some funds. | Some analysts said an overreaction and higher-than-normal volume was possible as a result of pent-up demand. The two-day shutdown came during the busy corporate earnings season and at the end of the fiscal year for some funds. |
Chris Bertelsen, chief investment officer at Global Financial Private Capital in Sarasota, Fla., said the day would be marked by “the compression effect,” marked by above-average volume as “one day of trading basically represents three.” | Chris Bertelsen, chief investment officer at Global Financial Private Capital in Sarasota, Fla., said the day would be marked by “the compression effect,” marked by above-average volume as “one day of trading basically represents three.” |
“However, that’s volume to the upside since we’ve had some positive underpinnings with strong earnings from Ford and BP and good news out of Europe,” he said. “If we had been open over the past two days, that would have been reflected in the market, but since we were dark, all that is going to come out today.” | “However, that’s volume to the upside since we’ve had some positive underpinnings with strong earnings from Ford and BP and good news out of Europe,” he said. “If we had been open over the past two days, that would have been reflected in the market, but since we were dark, all that is going to come out today.” |
Stocks moving in early trading included Ford (up 6 percent), Advanced Micro Devices (up 1.9 percent) and Home Depot (up 2.5 percent). | |
Home Depot, a Dow component, is viewed as a company that may benefit from the storm as people buy rebuilding supplies. Insurance companies, which may have to pay billions of dollars of damage relating to the storm, will also be in view, as will airlines, which canceled thousands of flights in the Northeast because of Hurricane Sandy and its aftereffects. | Home Depot, a Dow component, is viewed as a company that may benefit from the storm as people buy rebuilding supplies. Insurance companies, which may have to pay billions of dollars of damage relating to the storm, will also be in view, as will airlines, which canceled thousands of flights in the Northeast because of Hurricane Sandy and its aftereffects. |
All of the American stock market operators took part in coordinated testing Tuesday for trading on the New York Stock Exchange’s backup system, in case it needed to be used. | All of the American stock market operators took part in coordinated testing Tuesday for trading on the New York Stock Exchange’s backup system, in case it needed to be used. |
The exercise was also aimed at allowing member trading firms, many of which were operating on backup systems because of complications from the storm, a chance to ensure they were ready to resume trading. | The exercise was also aimed at allowing member trading firms, many of which were operating on backup systems because of complications from the storm, a chance to ensure they were ready to resume trading. |
Ford posted a third-quarter profit that trounced analysts’ forecasts on Tuesday, driven by higher vehicle prices and record profit margins of 12 percent in North America. General Motors reported earnings Wednesday that beat expectations. | Ford posted a third-quarter profit that trounced analysts’ forecasts on Tuesday, driven by higher vehicle prices and record profit margins of 12 percent in North America. General Motors reported earnings Wednesday that beat expectations. |
Other companies, including Pfizer, delayed the release of results because of the impact of the storm. | Other companies, including Pfizer, delayed the release of results because of the impact of the storm. |
In Europe, stocks were generally ahead before Wall Street joined in. The Euro Stoxx 50 ended the day up 0.1 percent, the DAX in Frankfurt was up 0.1 percent and the CAC 40 in Paris fell 0.3 percent. The FTSE 100 in London was down 0.7 percent. | |
Walt Disney agreed to buy filmmaker George Lucas’s Lucasfilm and its “Star Wars” franchise for $4.05 billion in cash and stock, a blockbuster deal that includes the surprise promise of a new film in the series in 2015. Disney, a Dow component, opened higher but soon fell 0.4 percent. | Walt Disney agreed to buy filmmaker George Lucas’s Lucasfilm and its “Star Wars” franchise for $4.05 billion in cash and stock, a blockbuster deal that includes the surprise promise of a new film in the series in 2015. Disney, a Dow component, opened higher but soon fell 0.4 percent. |
Investors were looking ahead to Friday’s report on United States unemployment, the last before Tuesday’s presidential election. Economists forecast a gain 125,000 jobs in October, up 11,000 from the previous month. |