NEW YORK – Remember when President Grover Cleveland ran for a second consecutive term, Jack the Ripper spread terror in London and Kaiser Wilhelm II became German emperor?
Yes, it’s been that long.
On Monday, shortly after midday, the New York Stock Exchange announced that it would close stock trading for a second day today because of a once-in-a-century storm. Once in a 124-year storm is more apt. The last time trading was halted for two consecutive days because of weather was in 1888.
This time, instead of snow drifts 40 feet high, surging water threatens to crest between 6 and 11 feet. And instead of the Blizzard of 1888, it is the more benign sounding, but equally disruptive, Sandy.
“It’s a monumental event, and we take it very seriously,” said Larry Leibowitz, chief operating officer of NYSE Euronext, the company that operates the New York Stock Exchange. “It’s not a hyped-up drama.”
Leibowitz spoke shortly after noon, after a series of conference calls with stock brokerage firms, regulators and officials during which a “consensus” emerged to close markets for a second day. As for Wednesday, he said he “fully hopes” the exchange would open.
Nasdaq, another major stock exchange, said it was optimistic, too.
As the storm approached Monday, water cascaded over seawalls in lower Manhattan and a highway running along the island’s East Side nearby was flooded in parts.
Inside the exchange, the lights were ablaze early Monday but, aside from security workers, few humans were present. There were no specialists on the floor matching buyers and sellers of stocks, and there were no traders.
At a Duane Reade drugstore a block or so away, there were more signs of life. One man was buying candles, scented, and asking for extra matches, as another walked out clutching a 12-pack of beer.
The uncertainty generated by the storm comes at the start of a big week in the United States. This is the last full week before next Tuesday’s presidential election and culminates Friday with the release of October’s employment report, which many analysts think could have an impact on the vote. Labor Department officials are still hopeful that the report can be released on time, but they acknowledge that the storm could cause a delay.
Originally, the NYSE had planned to close just its exchange floor and allow traders to buy and sell stock electronically. Then it decided to shut down electronic trading, too. The NYSE said it was worried about putting staff that were needed to help run the electronic trading in danger.
Much of New York’s Financial District was in a mandatory evacuation zone, but not the exchange’s building at 11 Wall Street.
NYSE’s Leibowitz said he was also worried that trading volume would be low because many investors would take the day off. The fear was that just a few trades could whip stock around like the storm outside, sending prices surging one minute or plunging the next. As automatic trading by computers has come to dominate stock trading, it was a fear voiced by other Wall Street experts.
“If you switch on the computers, they’ll be trading like it’s a normal day,” said Julian Bridgen, managing partner of Macro Intelligence 2 Partners, an investment consultancy, from his wind-whipped home in Hoboken, N.J. “You could have a potent cocktail.”
The last time the major exchanges closed for one day because of weather was on Sept. 27, 1985, when Hurricane Gloria struck.
Since 1885, the NYSE has shut trading 371 times for special events, such as emergencies, celebrations and mourning, according to the exchange. Some shutdowns lasted for minutes, others for days.
Stock trading halted for two hours in May 20, 1910, for the funeral of Britain’s King Edward VII. In February 1969, the exchange closed for a day because of snow. In early 1978, heavy snow forced Wall Street to suspend operations again.
Trading also has been interrupted during political crises. Trading was halted on Nov. 22, 1963, when President John F. Kennedy was assassinated. On March 30, 1981, markets stopped for about 45 minutes after word that President Reagan had been shot.
Some veteran Wall Streeters shrugged off the emergency close.
Robert Stovall, who started on Wall Street in 1940 as a messenger boy when he was 14, has endured it all – blizzards, hurricanes, transit strikes.
“It is not a big deal, it just seems like one when it’s happening,” said Stovall, managing director for Wood Asset Management in Sarasota. Fla. “I wouldn’t doubt that we may be closed down for a day or two or even three, but we’ll get over it. That’s been the record anyway.”
In commodity trading, the CME Group’s New York trading floor was closed, but electronic markets were functioning. Crude oil fell 74 cents to $85.54 in electronic trading. CME said Monday that electronic trading for commodities would also be open Tuesday.
Bond trading will be closed Tuesday.
While the U.S. was preparing for Sandy’s onslaught, markets were open in the rest of the world. In Europe, stocks fell. France’s CAC-40 fell 0.8 percent, Britain’s FTSE fell 0.2 percent and Germany’s DAX lost 0.4 percent. Insurers such as Munich Re, Aviva PLC and Zurich Insurance fared worse than other stocks as investors worried about the potential cost of the storm’s damage.
“The economic impact cannot be underestimated,” said Elsa Lignos, an analyst at RBC Capital Markets.
Some companies are postponing quarterly earnings reports scheduled for release early this week. So far, that includes Pfizer Inc. and Thomson Reuters.
Even with many markets shut down, there was some encouraging news about the U.S. economy Monday. The Commerce Department reported that consumer spending increased 0.8 percent in September. That followed a 0.5 percent gain in August and was the best showing since February.
Personal income rose 0.4 percent, an improvement from a slight 0.1 percent gain in August and the best gain since March. It’s a closely watched indicator because consumer spending drives about 70 percent of the nation’s economic activity.
Bond trading ended at noon Monday on the recommendation of the Securities Industry and Financial Markets Association. The yield on the benchmark 10-year Treasury note was 1.72 percent, compared with 1.75 percent late Friday.
AP Business Writers Daniel Wagner, Christina Rexrode and Pan Pylas contributed to this report.