March 23, 2023

Wall Street Reopens With a Mild Gain

After a historic two-day closing spurred when Hurricane Sandy flooded lower Manhattan and knocked out its power and public transit, Wall Street reopened Wednesday with slight gains in stock prices.

Trading was expected to be volatile following the first multiple-day closing of the stock market since 1888 for weather-related reasons.

Travel into and around New York City remained limited, and wide-scale power outages meant many would be unable to work even from home.

Shortly after the 9:30 a.m. opening, the Dow Jones industrial average was up 0.5 percent, or about 60 points. The Standard Poor’s 500-stock index added 0.2 percent and the Nasdaq composite index fell 0.2 percent. The mayor of New York City, Michael Bloomberg, rang the bell that marks the start of trading.

Some analysts said an overreaction and higher-than-normal volume was possible as a result of pent-up demand. The two-day shutdown came during the busy corporate earnings season and at the end of the fiscal year for some funds.

Chris Bertelsen, chief investment officer at Global Financial Private Capital in Sarasota, Fla., said the day would be marked by “the compression effect,” marked by above-average volume as “one day of trading basically represents three.”

“However, that’s volume to the upside since we’ve had some positive underpinnings with strong earnings from Ford and BP and good news out of Europe,” he said. “If we had been open over the past two days, that would have been reflected in the market, but since we were dark, all that is going to come out today.”

Stocks moving in premarket trading included Ford, Advanced Micro Devices and Home Depot, all of which climbed.

Home Depot, a Dow component, is viewed as a company that may benefit from the storm as people buy rebuilding supplies. Insurance companies, which may be on the hook for billions of dollars of damage relating to the storm, will also be in view, as will airlines, which canceled thousands of flights in the northeast because of Sandy.

All of the American stock market operators took part in coordinated testing Tuesday for trading on the New York Stock Exchange’s backup system, in case it needed to be used.

The exercise was also aimed at allowing member trading firms, many of which were operating on backup systems due to complications from the storm, a chance to ensure they were ready to resume trading.

Ford posted a third-quarter profit that trounced analysts’ forecasts on Tuesday, driven by higher vehicle prices and record profit margins of 12 percent in North America. General Motors reported earnings Wednesday that beat expectations.

In Europe, stocks were generally ahead before Wall Street joined in. The Euro Stoxx 50 was up 0.5 percent, the DAX in Frankfurt was up 0.6 percent and the CAC 40 in Paris rose 0.2 percent. The FTSE 100 in London, however, fell 0.3 percent.

Other companies, including Pfizer, delayed the release of results because of the impact of the storm.

Walt Disney agreed to buy filmmaker George Lucas’s Lucasfilm and its “Star Wars” franchise for $4.05 billion in cash and stock, a blockbuster deal that includes the surprise promise of a new film in the series in 2015. Disney, a Dow component, rose in premarket trading.

Investors will be looking ahead to Friday’s report on United States unemployment, the last before Tuesday’s presidential election. Economists forecast a gain 125,000 jobs in October, up 11,000 from the previous month.

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