Markets Close as Hurricane Sandy Nears

As Hurricane Sandy creeps toward the Eastern Seaboard at 14 mph, millions of people living in coastal states – especially New York, New Jersey, Delaware and Connecticut – are preparing for one of the worst storms in years.

Americans are bracing for the worst, with a total shutdown of mass transit and mandatory evacuations along low-lying areas because of the possibility of severe flooding. The Holland Tunnel and the Brooklyn Battery Tunnel, which are particularly prone to flooding, will close at 2 p.m., Gov. Andrew M. Cuomo said.

In addition to school cancellations and store closings across the Northeast, the New York Stock Exchange (NYSE) and other nationally based financial markets have also opted to stay closed for the day.

The decision to close the markets was made Sunday night, as weather reports of devastating wind and water damage worsened by the hour. Officials anticipate the shutdown to continue through Tuesday.

Announcement Comes in Response to Worsening Predictions

NYSE originally announced early Sunday it would close the physical trading floor and allow electronic trading to continue. As storm warnings continued and the potential for storm damage increased, the NYSE decided the shutdown would include all electronic trading, as well.

The decision to close the market was a coordinated one, involving NYSE regulators as well as government officials. The Nasdaq stock market and other exchanges located in the U.S. will also be closed for the day.

Even American cities further west have been affected by the storm. Chicago’s CME Group announced it would suspend trading of equity index options and related transactions. The group’s New York Mercantile Exchange (NYMEX) as its trading floor sits within the mandatory evacuation zone in Manhattan.

It’s very unusual for trading to come to a halt because of weather. Back in 1985, NYSE shut down as the result of Hurricane Gloria. Then in 1996, a blizzard created a delay in opening and an early close to the exchange. The most recent closing was in 2001 and was unrelated to the weather. Following the World Trade Center attacks on Sept. 11, the NYSE suspended trading for four days, the longest suspension since the Great Depression.

Hurricane Sandy Already Proving Deadly

While only deemed a Category 1 storm, Hurricane Sandy is already responsible for 65 fatalities in the Caribbean. Meteorologists expect the storm to come ashore in the U.S. Monday evening or Tuesday morning, possibly in New Jersey. They expect storm damage to be substantial, as it will likely collide with a storm coming from the west as well as cold air coming from the Arctic.

More than 12 inches of rain is possible, according to forecasters, with high winds for hundreds of miles from the storm’s center. The effects of the massive storm are far and wide; North Carolina, Kentucky and West Virginia expect to receive two feet of snow.  According to the National Hurricane Center (NHC), winds will stretch across the eastern third of the U.S. by Monday night or Tuesday.

As of Monday morning, the storm contains hurricane-force winds which can extend up to 175 miles from its center, with tropical storm-force winds as far out as 520 miles.

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it seven years ago, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering college and professional sports, which are the fantasy worlds of finance. His work has been published by the Associated Press, New York Times, Washington Post, Chicago Tribune, Sports Illustrated and Sporting News, among others. His interest in sports has waned some, but his interest in never reaching for his wallet is as passionate as ever. Bill can be reached at bfay@debt.org.

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    Sources:

    1. Main, D. (2012, October 29). Why is hurricane Sandy so big? Fox News. Retrieved from http://www.foxnews.com/science/2012/10/29/why-is-hurricane-sandy-so-big/
    2. Associated Press. (2012, October 29). Hurricane Sandy forces New York Stock Exchange, financial markets to expand shutdown. Retrieved from http://www.cbsnews.com/8301-500395_162-57541896/hurricane-sandy-forces-new-york-stock-exchange-financial-markets-to-expand-shutdown/
    3. Cuomo, A.M. (2012, October 29). Storm Watch: Hurricane Sandy. Retrieved from http://www.governor.ny.gov/
    4. Photo credit: NASA.gov