NYSE and Nasdaq say they plan to open Wednesday for regular trading hours, reports CNBC's Bob Pisani.
Investors are bracing for a possibly wild ride when the stock market reopens Wednesday after its first weather-related shutdown in more than a quarter-century.
The New York Stock Exchange and Nasdaq will reopen for a full day of trading after a two-day closure for Hurricane Sandy, which slammed into the East Coast Monday, causing major flooding and widespread power outages. The stock exchange's landmark building in Lower Manhattan was undamaged, but officials are testing the possibility of routing all trades through electronic platforms since transportation in the area has been crippled by the storm.
J.J. Kinahan, TD Ameritrade’s chief derivatives strategist, said he expects heavy trading volume and volatility for at least the first hour of trading Wednesday “as everyone tries to figure out their positions” and digests dozens of fresh corporate earnings reports, many of which were postponed because of Sandy.
Individual issues could move sharply as investors reassess insurers and other companies affected by the massive storm.
Investors might “walk away with the conclusion that this is a good thing for those companies because they can raise their premiums, and so you will see that adjustment to stock prices when the market opens,” said Hugh Johnson, chief investment officer of Hugh Johnson Advisors in Albany, N.Y.
The U.S. stock market hasn’t closed due to weather since Hurricane Gloria forced it to shutter operations in September 1985 and hasn't been forced into a two-day weather shutdown since the Great Blizzard of 1888. Markets did close for four days after the terrorist attacks of Sept. 11, 2001.
While there could be a sudden move at the opening, investors will mainly be facing the same problems they faced before Sandy smashed into the metro region: uncertainty surrounding the outcome of next week’s presidential election, Friday’s unemployment report and the general sluggish state of the global economy.
Sam Stovall, chief investment strategist at S&P Capital IQ, said the stock market's performance historically has been uneven after major hurricanes.
Stovall looked at the 10 costliest hurricanes, from Katrina in 2005 to Betsy in 1965, and found that, on average, the S&P 500 rose between 3 percent and 6 percent in the subsequent one to six months.
“Of course there is no guarantee that history will repeat itself,” he added.
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