Stock Market News for October 30, 2012 - Market News
30 Outubro 2012 - 7:06AM
Zacks
Hurricane Sandy, one of the biggest
storms to hit the U.S., forced the Street to shut operations on
Monday. While the storm lashed the eastern coast, many companies
had to postpone their earnings releases. Previously, markets were
to remain shut only partially as electronic trading activities were
to remain open. However, with the advent of a storm potent enough
to affect around 60 million lives, markets had to be shut down
completely and will remain so on Tuesday as well.
However, Sandy has left its mark in
the exchanges’ record books. It was the first time in 27 years that
the markets were shut due to weather issues. Also, NYSE’s
announcement to shut operation on Tuesday as well will mark the
first time since 1888 that the exchange will be closed back-to-back
for two days due to weather troubles. Incidentally, this happens on
the anniversary of the Wall Street Crash of 1929.
The decision of the exchanges to
remain closed came after consultations among the exchanges and
‘market participants’. NYSE’s official press release stated: “We
support the consensus of the markets and the regulatory community
that the dangerous conditions developing as a result of Hurricane
Sandy will make it extremely difficult to ensure the safety of our
people and communities, and safety must be our first priority. We
will work with the industry to determine the next steps in
restoring trading as soon as the situation permits”.
U.S. President Barack Obama
declared emergency in some states. Eqecat, a disaster modeling
company, projected that the U.S. economy may incur losses between
$10 billion and $20 billion. Interestingly, while the storm has the
potential to cause severe damage, certain sectors may somewhat get
a boost. The chief economist at Moody's Analytics, Mark Zandi,
said: “Restaurants will be hurt, but grocery stores will benefit;
general merchandise stores will lose business, but online retailing
should get a boost”.
The nation’s infrastructure may
suffer huge damage, but certain sectors may be
benefitted. Forbes has compiled a list of 10
stocks that may gain from the situation. The list includes
The Home Depot, Inc. (NYSE:HD) and Lowe's Companies Inc.
(NYSE:LOW), which can be instrumental in the ‘repair work’. Also,
the need to pump out the flood might see the businesses of Xylem
Inc. and Pentair Ltd (NYSE:PNR) improve. Construction companies
stand the best chance to benefit because of the reconstruction
activities to be undertaken following the storm. Construction
companies including Fluor Corporation (NYSE:FLR) and Granite
Construction Incorporated (NYSE:GVA) have therefore made it to the
Forbes list.
However, looking at the broader
landscape, Mark Zandi noted: “Of course, if the storm knocks out
major infrastructure like refineries, cell towers, trains, sea and
airports, then the economic damage will be more severe and
difficult to recover from”. Another major concern is related to the
nuclear industry. We had seen last year how natural disasters in
Japan had affected nuclear plants, and thereafter the energy
sector.
Meanwhile, many companies had to
postpone their earnings releases. Among them are Automatic Data
Processing, Inc. (NASDAQ:ADP), Avon Products Inc. (NYSE:AVP),
Cummins Inc. (NYSE:CMI), Dendreon Corp. (NASDAQ:DNDN), Hess
Corporation (NYSE:HES), Iconix Brand Group, Inc. (NASDAQ:ICON), MDC
Holdings Inc. (NYSE:MDC), Office Depot, Inc. (NYSE:ODP), Ralph
Lauren Corporation (NYSE:RL), Time Warner Inc. (NYSE:TWX) and
Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) who have decided
to postpone the release of the quarterly results.
Nonetheless, the U.S. Bureau of
Economic Analysis came out with personal income and personal
spending data. According to the report, personal income was up 0.4%
or $48.1 billion in September and personal consumption expenditures
(PCE) gained 0.8% or $87.9 billion. The rise in personal income was
in line with consensus estimates, but the rise in personal spending
was ahead of the consensus estimate of a 0.6% rise.
AUTOMATIC DATA (ADP): Free Stock Analysis Report
AVON PRODS INC (AVP): Free Stock Analysis Report
CUMMINS INC (CMI): Free Stock Analysis Report
DENDREON CORP (DNDN): Free Stock Analysis Report
FLUOR CORP-NEW (FLR): Free Stock Analysis Report
GRANITE CONSTRU (GVA): Free Stock Analysis Report
HOME DEPOT (HD): Free Stock Analysis Report
HESS CORP (HES): Free Stock Analysis Report
ICONIX BRAND GP (ICON): Free Stock Analysis Report
LOWES COS (LOW): Free Stock Analysis Report
MDC HLDGS (MDC): Free Stock Analysis Report
OFFICE DEPOT (ODP): Free Stock Analysis Report
PENTAIR LTD (PNR): Free Stock Analysis Report
RALPH LAUREN CP (RL): Free Stock Analysis Report
TIME WARNER INC (TWX): Free Stock Analysis Report
VERTEX PHARM (VRTX): Free Stock Analysis Report
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