As Hurricane Sandy, also known as Frankenstorm, bears down on the East Coast, financial markets are being shuttered, business is coming to a halt and potential economic damages are already being assessed in preparation for what is billed as “the storm of the century.”
Both the New York Stock Exchange and Nasdaq were closed Monday, and will likely be closed Tuesday, although exchange officials on Monday were in conference calls to determine how to proceed. However, trading in all securities listed on the Big Board was moved to Arca, the electronic trading platform operated by NYSE-Euronext.
“Do not underestimate this storm,” said Gov. Andrew Cuomo of New York at a press conference on Monday morning. He noted that the superstorm fueled in part by Hurricane Sandy, even before reaching landfall, has already surpassed the overall damage wreaked by Hurricane Irene last year.
‘Don’t Be Stupid’: NJ Gov. Christie
“Don’t be stupid, get out, and go to higher, safer ground,” Gov. Chris Christie of New Jersey said in a news conference.
Analysts continue to assess the potential costs of the storm before a six- to 11-foot storm surge hits New York at high tide on Monday night. Frankenstorm could affect as many as 60 million people and cause damage in the range of $15 billion to $18 billion, according to a Bloomberg report. Hurricane Irene did $7 billion of damage last year.
The exchange closures were announced due to fears for staff safety despite resistance from banks and broker-dealers, which had requested that electronic trading remain open. Mayor Michael Bloomberg of New York announced Sunday the closure of the subway and bus system, making most finance workers’ commute all but impossible for an indefinite period.
Monday is the first time the NYSE has closed since Sept. 11, 2001. Both Goldman Sachs and Citigroup have closed their lower Manhattan offices, including their giant trading floors, to all but essential staff members.
As for the bond markets, the Securities Industry and Financial Markets Association recommends a full market close on Tuesday for the trading of U.S. dollar-denominated fixed-income securities in the United States “due to Hurricane Sandy and severe weather,” SIFMA announced Monday.