The US stock markets will be closed for the second day on Tuesday due to the Hurricane Sandy. Will the markets be able resume operations on the final trading day of the month on Wednesday?
On Monday, the stock markets of US were closed owing to bad weather. This has been the first such shut-down after almost 27 years. The bond markets closed earlier as the waves and winds from the hurricane lashed the Eastern coast.
Nasdaq OMX Group (NDAQ.O) and NYSE Euronext (NYX.N), the two largest exchange operators in US, told that they intended to reopen on Wednesday, if the weather conditions permit. On Tuesday, the bond markets will also remain closed and may reopen on Wednesday.
Since Wednesday marks the month end (the time when the traders price portfolios), it is the main trading day.
However, it is feared that the power outages could make it impossible to reopen the markets on Wednesday too.
By late Monday, the effects of the shutdown of the markets were starting to become evident as the analysts estimates that the trading firms and banks could lose revenue of several millions of dollars.
Few of the firms postponed their reports of quarterly earnings and many banks shut down their branches in Northeast, while they promised to waive away some fees in the areas threatened by the hurricane.
Eqecat, a calamity modeling firm told that the storm would probably cause $5- $10 billion insured losses and $10 billion- $20 billion economic losses.
The closure of trading also endangered to delay the IPOs of around 6 firms, while the employees of Facebook Inc (FB.O) were stopped for trading shares in the company after the expiry of lockup on trading.
The bad weather conditions also led to cancellation of the financial meetings, leaving firms that had flown officials into New York looking for ways to keep them occupied.
However, it was a busy day for back-office and operations employees as they toiled hard to keep the company systems and data centers up and running.
Early on Monday, the equities trading officials stressed the stock exchanges to correspond their plans clearly to avoid repeating the uncertainty that was lingering on Sunday.
The market regulators and participants decided too late on Sunday to close the stock as well as options markets, overturning a plan to continue with electronic trading on Monday.
The closure of the stock market implies that firms that were looking forward to go public will have to wait; the super storm Sandy has indeed created quite a roar in the US!