US Stock Markets Shut Down as Sandy Threatens the East Coast
The US equity market will not open for trading on October 29, with hurricane Sandy threatening the East Coast. The decision was taken following consultations with regulators and New York City officials late on October 28. Sandy, which killed 66 people in the Caribbean, is expected to hit the New Jersey shore near Atlantic City on Monday night.
**US Stock Trading Cancelled**
The New York Stock Exchange (NYSE) and the Nasdaq will suspend all operations for the first time since 1985 when hurricane Gloria closed trading. “The US equity markets will not open on Monday because of the impending storm,” said John Nester, a spokesman for the US Security and Exchange Commission (SEC), as quoted by the FT. “The decision was made by the markets and market participants after careful consideration in consultation with the SEC.” Mr Nester also added that the SEC would stay in communication with the markets as the situation develops. Depending on the weather conditions, the shutdown may extend through to October 30.
Bloomberg quotes Larry Leibowitz, CEO of NYSE Euronext, as saying that keeping the market operating did not seem to serve the public interest. “Why do this? To prove we can? That didn’t seem to make a lot of sense,” noted Mr Leibowitz.
**Impact on Other Markets**
The suspension of US stock trading will also result in other markets closing, with US equity trading spread across 13 exchanges and dozens of private venues run by brokerages. Bloomberg reports that the Chicago Mercantile Exchange is expected to suspend floor trading on the Nymex oil market since it is located in an evacuation zone near the Hudson River in NYC. Bond trading, however, is likely to remain open on Monday morning and close at noon.
!m[NYSE Closes Trading Floor For The First Time Since 1985 ](/uploads/story/660/thumbs/pic1_inline.png)“It’s an inconvenience, but clearly the safety of the employees and participants in the market is a primary concern,” said James Angel, a professor at Georgetown University’s McDonough School of Business in Washington, as quoted by Bloomberg. “Even if the exchanges can operate totally remotely, people connecting to the exchanges may be battling floods.”
**Companies Bracing for the Storm**
Financial companies have also made plans to close some offices, to conduct business online and to let employees work from home. Bloomberg reports that the credit card company American Express Co (NYSE:AXP) whose headquarters is located in lower Manhattan, will shut all its offices in the tri-state area, whereas the investment bank Goldman Sachs (NYSE:GS) will be open for business with help from overseas offices and people working remotely.
Citigroup (NYSE:C) will shut offices located in potential flood zones. “Citi has contingency plans in place including locations that can be utilised to ensure continuity of operations,” said Shannon Bell, a Citigroup spokeswoman, as quoted by the New York Times. “Citi is committed to providing uninterrupted service to our clients during the storm and seeks to minimise any possible impact,” she added.
JPMorgan Chase (NYSE:JPM) also plans closing an office in a potential flood zone in lower Manhattan. The company’s other offices will remain open and ready to run off backup generators if needed.
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