Shaken by Hurricane Sandy and unmoved by a solid October jobs report, stocks fell sharply Friday. The Dow Jones industrial average dropped 139 points as details about the storm’s costs began to emerge.
Verizon Communications, whose Lower Manhattan operations are still without power, said the storm would have a significant effect on its fourth-quarter earnings. Verizon said it could not yet estimate the cost of the storm, which downed cell towers across the region. Shares of Verizon fell 62 cents, to $44.52.
“The information coming out from the economic impact of Sandy is a negative,” said Rob Lutts, president of Cabot Money Management in Salem, Mass. “I think the markets are trying to digest that and understand that, so there is a little bit of uncertainty.”
Insurers, the group that will feel the storm’s effects most acutely, plunged as analysts warned that the storm will eat into their income. Raymond James analysts lowered their estimates for Allstate, while Barclays analysts cut theirs for Hartford Financial Services.
The chairman of Hartford, Liam McGee, told investors in a conference call that the storm’s costs were just beginning to come into focus. “It’s much too early for us to provide data with any level of certainty,” he said.
Shares of Hartford fell 66 cents, or 3 percent, to $21.26. Allstate dropped 49 cents, or 1.25 percent, to $38.56. The American International Group plunged $2.52, or 7.16 percent, to $32.68. Genworth Financial dropped 16 cents, or 2.57 percent, to $6.06.
After a day of steady selling, the Dow Jones industrial average closed down 139.46 points, or 1.05 percent, at 13,093.16. The Standard Poor’s 500-stock index dropped 13.39 points, or 0.94 percent, to 1,414.20. The Nasdaq composite index lost 37.93 points, or 1.26 percent, to 2,982.13.
The day started with a burst of hope: In the last big piece of economic news before the presidential election on Tuesday, the Labor Department said employers added 171,000 jobs last month, while the unemployment rate ticked up to 7.9 percent. More jobs were added in the previous two months than was first reported, the government said.
European stocks rose on the news and American stocks opened higher. The Dow gained as much as 57 points in the first half-hour of trading. After that, the indexes commenced a steady slide.
All 10 categories in the S. P. 500 were lower by the end of the day. Consumer discretionary stocks had the narrowest loss.
The Internet travel sites Priceline.com and TripAdvisor were among the S. P. 500’s top gainers. The companies surprised investors with better-than-expected third-quarter earnings after the market closed on Thursday. TripAdvisor rose $5.71, or 19.42 percent, to $35.12. Priceline added $48.64, or 8.3 percent, to $634.74.
Starbucks rounded out the S. P. 500’s top three gainers, adding $4.22, or 9.05 percent, to $50.84. The company said late Thursday that global revenue at cafes open at least a year rose 6 percent during its fiscal fourth quarter, which runs from July through September.
Shares of Restoration Hardware, the home-decor retailer, shot up $7.10, or 30 percent, to $31.10, in their first day of trading on the New York Stock Exchange.
Interest rates were barely changed. The Treasury’s 10-year note was up 4/32, to 99 6/32, and the yield fell to 1.72 percent from 1.73 percent late Thursday.
Article source: http://www.nytimes.com/2012/11/03/business/daily-stock-market-activity.html?partner=rss&emc=rss