It was business as usual for markets on Wednesday following
two days of closure due to Hurricane Sandy and it ended almost
flat yesterday. This was for the first time that markets were
closed for two consecutive days due to weather problems since
1888. Meanwhile, all three major indices fell sharply for the
month, with the Dow tumbling nearly 2.5%. Homebuilder stocks were
the major gainer among the S&P 500 industry group.
The Dow Jones Industrial Average (DJI) slipped 0.1% to close the
day at 13,096.46. The Standard & Poor 500 (S&P 500) edged
up 0.02% to finish yesterday's trading session at 1,412.16. The
tech-laden Nasdaq Composite Index dropped 0.4% to end at
2,977.23. The fear-gauge CBOE Volatility Index (VIX) gained 4.4%
to settle at 18.60. Consolidated volumes on the New York Stock
Exchange, American Stock Exchange and Nasdaq were roughly 6.3
billion shares, lower than the daily average of 6.51 billion
shares. Advancers outpaced the decliners on the NYSE; as for 56%
stocks that gained, 41% stocks closed in the red. For the month,
the Dow tumbled 2.5%, the S&P 500 dropped 2.0% and the Nasdaq
dropped 4.5% following lower-than-expected earnings from
blue-chips companies and gloomy global economic conditions.
Benchmarks reopened trading after a two-day closure caused by
Hurricane Sandy. Larry Leibowitz, chief operating officer of NYSE
Euronext (NYSE:
NYX
), said "The open was a positive relief after four days of
sitting on edge," and added "No matter how much planning you do,
you can't foresee that kind of flooding".
Looking at the economic impact of Sandy, various forecasts
predict the storm will cause damages of up to $50 billion.
Earlier, Eqecat, a disaster modeling company, had projected that
the U.S. economy may incur losses between $10 billion and $20
billion. Separately, Kinetic Analysis Corp is projecting losses
will reach $25 billion; while its research and development
director said insured losses could amount to between $7 billion
to $8 billion. Forecasting firm IHS Global Insight estimates that
property damages may touch $20 billion and another $10 billion to
$30 billion will be incurred as lost business. The storm has
already left about 8 million houses without power and thousand of
flights have been cancelled. Also, about 70% of East Coast oil
refineries were forced to remain closed. Moreover, New York has
been severely affected and this region substantially contributes
to the nation's economic output.
A batch of companies reported their earnings yesterday. General
Motors Company's (NYSE:
GM
) shares surged 9.6% following better-than-expected quarterly
results. According to General Motors, the company targeted a
rebound from loss to a breakeven level in its European
operations. On Tuesday, Ford Motor Company (NYSE:
F
) had posted its quarterly results; wherein it reported a 17.6%
year-on-year surge in its third quarter earnings. The company's
shares surged 8.2% yesterday.
In economic news, Automatic Data Processing's (NASDAQ:
ADP
) National Employment report stated that the U.S. private sector
employment increased by 88,200 in the month of September from
76,400 in the month of August. The September report was based on
their new methodology. According to the report, large businesses
added 35,800 employees, whereas medium and small business added
28,000 and 24,300 employees, respectively, in the month of
September. Service sector jobs increased by 97,500, while goods
producing jobs decreased by 9,300.Construction companies added
9,100 jobs and employment in professional and business services
increased by 17,400.
Meanwhile, the Chicago Purchasing Managers index edged up 0.2
points to 49.9 in the month of October from 49.7 in the month of
September. This was below consensus estimates of 51.4. According
to the report, five of the seven business activities reflected
weakness. Expansion in employment touched its lowest level in 33
months.
The technology sector was the major loser among the S&P 500
group of companies with Apple Inc. (NASDAQ:
AAPL
) losing 1.4%. Apple's shares tumbled over 15% from an all-time
high reached in mid-September. Stocks such as Hewlett-Packard
Company (NYSE:
HPQ
), Intel Corporation (NASDAQ:
INTC
), SanDisk Corporation (NASDAQ:
SNDK
), NVIDIA Corporation (NASDAQ:
NVDA
) and Texas Instruments Incorporated (NASDAQ:
TXN
) lost 1.7%, 1.5%, 1.1%, 0.6% and 2.2%, respectively.
The SPDR S&P Homebuilders (XHB) surged 1.9% and was the major
gainer among the S&P 500 group of companies. Stocks such as
The Home Depot, Inc. (NYSE:
HD
), Lowe's Companies, Inc. (NYSE:
LOW
), PulteGroup, Inc. (NYSE:
PHM
), M.D.C. Holdings, Inc. (NYSE:
MDC
) and D.R. Horton, Inc. (NYSE:
DHI
) gained 2.2%, 3.3%, 0.4%, 1.1% and 1.0%, respectively.
APPLE INC (AAPL): Free Stock Analysis Report
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D R HORTON INC (DHI): Free Stock Analysis
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FORD MOTOR CO (F): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis
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HOME DEPOT (HD): Free Stock Analysis Report
HEWLETT PACKARD (HPQ): Free Stock Analysis
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INTEL CORP (INTC): Free Stock Analysis Report
LOWES COS (LOW): Free Stock Analysis Report
MDC HLDGS (MDC): Free Stock Analysis Report
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PULTE GROUP ONC (PHM): Free Stock Analysis
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TEXAS INSTRS (TXN): Free Stock Analysis
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