U.S. stocks open mostly higher after Sandy
(MoneyWatch) U.S. stocks opened mostly higher, after being closed for two days for Sandy. It was the first unscheduled multiple-day closing for a weather-related reason since the blizzard of 1888. The last time the market closed due to weather was in 1985 for Hurricane Gloria. New York City Mayor Mike Bloomberg rang the opening bell, proclaiming on Twitter that "The finance capital of the world is open for business."
Traders expect that there could be volatility today, as pent up worries over the economy and corporate earnings clash with the final day of the month and the end of the fiscal year for some mutual funds. It's expected that certain sectors of the market are likely to come under pressure, including property and casualty insurance companies, transportation companies, casinos, restaurant and hospitality, as well as utilities and retailers. On the upside, home improvement retailers, supermarkets, large manufacturers which provide hardware to utility companies, and insurance claims processing servicers could benefit.
Early estimates of Sandy's damage are running between $10 and $20 billion and as high as $50 billion, of which about half will be insured losses. Although these numbers are staggering, they represent a fraction of $15 trillion economy. In fact, the impact on the broader economy could provide a temporary boost in hiring during the recovery and rebuilding process.
As investors return this week, they will also focus on the nation's jobs market. Tomorrow, there are three "warm-up" reports due: The Challenger job cut report, ADP private sector employment report and weekly jobless claims. The main attraction will be the October jobs report, which is due on Friday. There were concerns that the Labor Department would have to delay the release due to Sandy. The Labor Department has already completed its monthly household and business surveys, but workers need to crunch those numbers to create the official report. However, the report is expected to be released as scheduled.
The final monthly jobs report before the election is expected to underscore that the current pace of economic growth is not strong enough to move the needle on the jobs situation. Consensus estimates is for 120,000 jobs added during the month and for the unemployment rate to edge up to 7.9 percent. This year, the U.S. economy has added an average of 146,000 jobs per month, which is certainly better than losing jobs, but not strong enough to get enough of the 12.1 million unemployed back to work, not to mention keep up with the new entrants into the work force.
