Hurricane Sandy, one of the biggest storms to hit the U.S.,
forced the Street to shut operations on Monday. While the storm
lashed the eastern coast, many companies had to postpone their
earnings releases. Previously, markets were to remain shut only
partially as electronic trading activities were to remain open.
However, with the advent of a storm potent enough to affect
around 60 million lives, markets had to be shut down completely
and will remain so on Tuesday as well.
However, Sandy has left its mark in the exchanges' record
books. It was the first time in 27 years that the markets were
shut due to weather issues. Also, NYSE's announcement to shut
operation on Tuesday as well will mark the first time since 1888
that the exchange will be closed back-to-back for two days due to
weather troubles. Incidentally, this happens on the anniversary
of the Wall Street Crash of 1929.
The decision of the exchanges to remain closed came after
consultations among the exchanges and 'market participants'.
NYSE's official press release stated: "We support the consensus
of the markets and the regulatory community that the dangerous
conditions developing as a result of Hurricane Sandy will make it
extremely difficult to ensure the safety of our people and
communities, and safety must be our first priority. We will work
with the industry to determine the next steps in restoring
trading as soon as the situation permits".
U.S. President Barack Obama declared emergency in some states.
Eqecat, a disaster modeling company, projected that the U.S.
economy may incur losses between $10 billion and $20 billion.
Interestingly, while the storm has the potential to cause severe
damage, certain sectors may somewhat get a boost. The chief
economist at Moody's Analytics, Mark Zandi, said: "Restaurants
will be hurt, but grocery stores will benefit; general
merchandise stores will lose business, but online retailing
should get a boost".
The nation's infrastructure may suffer huge damage, but
certain sectors may be benefitted
Forbes has compiled a list of 10 stocks that may gain from the
situation. The list includes The Home Depot, Inc. (NYSE:
) and Lowe's Companies Inc. (NYSE:
), which can be instrumental in the 'repair work'. Also, the need
to pump out the flood might see the businesses of Xylem Inc. and
Pentair Ltd (NYSE:
) improve. Construction companies stand the best chance to
benefit because of the reconstruction activities to be undertaken
following the storm. Construction companies including Fluor
) and Granite Construction Incorporated (NYSE:
) have therefore made it to the Forbes list.
However, looking at the broader landscape, Mark Zandi noted:
"Of course, if the storm knocks out major infrastructure like
refineries, cell towers, trains, sea and airports, then the
economic damage will be more severe and difficult to recover
from". Another major concern is related to the nuclear industry.
We had seen last year how natural disasters in Japan had affected
nuclear plants, and thereafter the energy sector.
Meanwhile, many companies had to postpone their earnings
releases. Among them are Automatic Data Processing, Inc. (NASDAQ:
), Avon Products Inc. (NYSE:
), Cummins Inc. (NYSE:
), Dendreon Corp. (NASDAQ:
), Hess Corporation (NYSE:
), Iconix Brand Group, Inc. (NASDAQ:
), MDC Holdings Inc. (NYSE:
), Office Depot, Inc. (NYSE:
), Ralph Lauren Corporation (NYSE:
), Time Warner Inc. (NYSE:
) and Vertex Pharmaceuticals Incorporated (NASDAQ:
) who have decided to postpone the release of the quarterly
Nonetheless, the U.S. Bureau of Economic Analysis came out
with personal income and personal spending data. According to the
report, personal income was up 0.4% or $48.1 billion in September
and personal consumption expenditures (PCE) gained 0.8% or $87.9
billion. The rise in personal income was in line with consensus
estimates, but the rise in personal spending was ahead of the
consensus estimate of a 0.6% rise.
AUTOMATIC DATA (ADP): Free Stock Analysis
AVON PRODS INC (AVP): Free Stock Analysis
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DENDREON CORP (DNDN): Free Stock Analysis
FLUOR CORP-NEW (FLR): Free Stock Analysis
GRANITE CONSTRU (GVA): Free Stock Analysis
HOME DEPOT (HD): Free Stock Analysis Report
HESS CORP (HES): Free Stock Analysis Report
ICONIX BRAND GP (ICON): Free Stock Analysis
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MDC HLDGS (MDC): Free Stock Analysis Report
OFFICE DEPOT (ODP): Free Stock Analysis
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