Stocks End Mixed in Lackluster Trade as Wall Street Returns to Work After Hurricane

Wednesday, 31 Oct 2012 05:47 PM

 

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Stocks closed mixed on Wednesday in their first session since Superstorm Sandy forced a historic two-day shutdown of trading.

The Dow Jones Industrial Average slipped 10.75 points to 13,096.46. The Standard & Poor's 500 index rose, but barely — up 0.22 of a point to 1,412.16.

Investors were nervous that a flood of orders after two days of pent-up demand from customers might lead to volatile trading. But stock prices barely budged at the opening, and stayed within a tight range throughout the day.

"It's been very smooth," Duncan Niederauer, CEO of NYSE Euronext, told CNBC from the exchange floor shortly after the opening bell. "The market-making community is more than staffed enough to be open."

The last time the New York Stock Exchange closed for two consecutive days because of weather was during the Blizzard of 1888 — 124 years ago. Since power was out in large parts of downtown Manhattan on Wednesday, the trading floor had to be run on backup generators.

Home Depot and Lowe's rose as investors anticipated more business for the home improvement chains as people made repairs in the aftermath of the devastating storm. Home Depot gained $1.34 to $61.38 and Lowe's rose $1.02 to $32.38.

Netflix soared $9.66 to $79.24 after financier Carl Icahn said he had bought a 10 percent stake in the troubled company.

Among the losers were insurers Chubb, Allstate and Travelers. Investors worried that the companies are most likely to suffer losses due to insurance claims. The trio have a large share of the insurance market in areas where Hurricane Sandy hit.

Chubb fell 98 cents to $76.98, Travelers dropped 62 cents to $70.94 and Allstate slipped 17 cents to $39.98.

Half of the ten industry sectors in the S&P 500 fell. Health-care stocks were down 0.7 percent, the biggest drop. Utility stocks led the gainers with a rise of 0.8 percent.

Stocks flitted between small gains and losses in the last hour of trading. The indexes started the day higher than the close on Friday, the last trading day. Then they dropped, and stayed in the red for much of the day.

The tech-heavy Nasdaq composite lost 10.72 points to 2,977.23.

The opening followed days of scrambling by NYSE officials to make sure power, telecom connections and computers would be ready. Many workers on the floor use the subways to get downtown, but Hurricane Sandy left the system with its worst damage in its 108-year history. New York's governor, Andrew Cuomo, says limited subway service will resume in New York City on Thursday.

About three stocks rose for every one that fell on the New York Stock Exchange. Trading volume was 3.4 billion shares, in line with the recent average.

The yield on the 10-year Treasury note fell to 1.69 percent from 1.72 percent at midday Monday. Bond trading was closed Tuesday and ended early Monday because of the storm.

Among other stocks making big moves:

— Facebook fell 83 cents to $21.11, a loss of nearly 4 percent. Facebook employees became eligible this week to sell restricted stock for the first time. Up to 1.5 billion more shares could be sold, about 3.5 times the 421 million shares that had been trading since Facebook's initial public offering in May.

— General Motors jumped $2.22 to $25.50 after the company reported a turnaround in its South American business and gave a brighter outlook for sales in Europe. GM posted better-than-expected results internationally outside of China

— Apple fell $8.68 to $595.32. The Wall Street Journal reported that the head of Apple's iPhone software development was asked to resign after he refused to sign a letter apologizing for the flaws of Apple's mapping application.

Wall Street traders and strategists were worried that a third day of delay would have meant more pent-up demand from customers to buy and sell stocks, resulting in a surge of orders that could send the market on wild ride. There were also doubts that there would be enough people in offices trading stocks for the market to match buyers and sellers smoothly.

But trading was placid from the start Wednesday, and much of the worry ebbed away.

"I've lived through a lot of events — crashes, mini-crashes, events of mother nature, man-made events, terrible events like 9/11," said Ted Weisberg, president of Seaport Securities, 72, shortly after the opening bell. "Somehow or other the markets continue."

To Jonathan D. Corpina, a broker who made his way to the building by flashlight early in the morning, it was a welcome sight.

"Walking up this pitch-black street ... with the red, white and blue lights going, it was clear this was the only building in downtown Manhattan that was open," said Corpina, senior managing partner of Meridian Equity Partners. He added, referring to the opening: "It was important to have gotten that message out there that we are here, we are accepting orders, it's business as usual."

The opening followed days of scrambling by NYSE officials to make sure power, telecom connections and computers would be ready for a full trading day. The exchange organized car pools to get people to work, set aside special parking for those driving in and booked hotel rooms nearby for traders and other staffers. And it filled fuel tanks for its generators to the brim.

"We're not going to have power in lower Manhattan until probably the weekend, so we've got to make sure that our generator continues to be topped up," Larry Leibowitz, NYSE's chief operating officer, said from the exchange floor after the opening. "There's just lots and lots of details that we've spent the last 36 hours running through."

Leibowitz said that his biggest concern had been ensuring enough people who worked both at, and for, the exchange could make it into work. On Tuesday, NYSE ran a mock trading session with its all-electronic Arca trading system just in case too few people showed up.

In the end, more people made it in than the exchange had expected.

Many workers on the trading floor use the subway to get downtown, but that was not an option Wednesday. Hurricane Sandy flooded many tunnels, leaving the 108-year-old subway system with its worst damage in history. New York's governor, Andrew Cuomo, said limited subway service will resume in New York City on Thursday.

"With subways down, I was wondering if people were even going to get to work today," said Randy Frederick, a managing director at Charles Schwab watching the opening from a TV at his Austin, Texas, office. "But obviously enough did. The markets opened stronger than many expected."

The two-day closing came just as big U.S. companies were reporting their quarterly earnings. That forced dozens of companies to postpone their reports to later this week, adding another wrinkle to the trading days ahead.

But trading volume Wednesday was normal, and it wound up being a relatively quiet day after all.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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