News Column

Markets Reopen Without a Hitch

Nov. 1, 2012

Matt Krantz, USA TODAY

morning stock market

Wall Street emerged from its two-day shutdown in the wake of Hurricane Sandy, and investors were pleased with the market's resiliency.

Operating on power from backup generators, the New York Stock Exchange opened on time. Brokers and traders also relied on contingency plans, but in the end it was considered to be an orderly day of trading.

"It went relatively smoothly," says Joe Saluzzi of Themis Trading, which was running off a backup generator all day. "There were some blips, but everything traded fine."

By the end of the day, stocks closed mixed. The Dow Jones industrial average gave up gains early in the day to close down 11 points to 13,096. The Standard & Poor's 500 index, on the other hand, eased up 0.22 points to close at 1412.

While the trading day went relatively smoothly, there were particular areas investors were keyed into, especially:

Insurance stocks. Given the magnitude of the damage, the hurricane is expected to bring large losses for insurers. The SPDR S&P Insurance exchange traded fund, which owns 44 insurance stocks, wound up flat for the day. Allstate, which reported better-than-expected quarterly results after the market closed, finished down 17 cents at $39.98.

Disaster-related stocks. If there was any notable action, it was among stocks positioned to benefit from the aftermath of the storm. Generac, a maker of generators, powered $5.67, or 20%, higher to $34. And the big-box home-improvement retailers also benefited, with Home Depot adding $1.34 to $61.38 and Lowe's rising $1.02 to $32.38.

Stocks with pent-up news. Both social-networking company Facebook and gadget maker Apple had significant news events during the market's closure, and Wednesday was investors' first chance to act. The shares of many Facebook employees were unlocked and available for sale for the first time on Monday, but had to wait until Wednesday's reopen. Shares of Facebook fell 83 cents, or 3.8%, to $21.11 on nearly twice the stock's normal volume. The lockup expiration was noteworthy because it made 179 million shares available for sale, which is about 8% of Facebook's number of shares outstanding. Apple fell $8.68 to $595.32, closing below $600 for the first time since February. The company announced a management shake-up earlier in the week.

Investors will now set their sights back on macro events influencing stocks, namely the health of the economy in Asia and Europe, says Doug Sandler of RiverFront Investment Group.

But above all, investors and traders are relieved markets are open again. "In light of all the challenges, we should feel pretty good people got their jobs done," says Andy Brooks, trader at T. Rowe Price.

Source: Copyright USA TODAY 2012

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