Weather shuts Wall Street for first time in 27 years
US stock markets are set to remain shut today, and possibly into tomorrow, after Wall Street trading was forced to close because of bad weather for the first time in 27 years yesterday.
Last night US stock market executives, regulators and brokers agreed to keep the US stock markets closed for a second day because of Hurricane Sandy.
Oil prices rose the most in three weeks and stocks fell around the world as Hurricane Sandy threatened the output of US refineries.
Shares in US insurer Travelers fell 1pc in trading in Germany, where it has a secondary listing.
Travelers is the only insurer listed in the Dow Jones Industrial Average, and likely to be hit with payouts as a result of the storm. Trading on its home market was suspended.
Allstate Corp, a US home and car insurer fell 0.8pc.
Many investors around the world opted to stick to the sidelines because of the US crisis. Markets in Europe experienced low trading volumes because of the lack of activity in the US.
Efforts are now under way to reopen US stock markets tomorrow, but a final decision has not yet been taken.
The US bond market, including electronic trading, was closed at midday yesterday.
It is understood the market only opened in the morning to enable the US government to issue a short-term debt at a scheduled auction. The bonds industry itself is understood to have been in favour of a total shutdown.
"It doesn't make sense to put people in harm's way or to only have half a market," said Nicholas Colas, chief market strategist at ConvergEx Group in New York.
The original decision to close Wall Street, including the New York Stock Exchange, was taken on Sunday night after SIFMA, the Wall Street trade group, held a conference call around 11pm to debate the looming safety concerns.
Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey, said the bigger financial institutions were willing to have staffing to stay open.
"The closer it got to midnight, the less sense it made to do it, because people were willing to do less and less," he said.
"Then we got a message that our building in Jersey City, the front doors are going to be sandbagged, so that effectively ended that."
An NYSE spokesman said a decision on when to resume trading was an industry decision.
Joe Christinat, a spokesman at Nasdaq, said: "All the exchanges and members and regulators and city officials are discussing this right now."
The stock market's closure means six companies that were looking to go public may have to wait longer.
The initial public offerings are scheduled to price later this week but will now probably have to be pushed back to next week, equity capital markets sources said.
"We can't market some of these deals while no one is on the other side of the phone," said one equity capital markets banker at a large Wall Street bank.
(Reuters and Bloomberg)