Superstorm Sandy, which has cut off electricity to Wall Street and left wide swathes of the northeast US coast soaked and wind-lashed, stopped equities trading for a second day and may extend its shutdown for a third on its path to cause an estimated $20 bn in damage to the US economy.
A week before the US election, Sandy, which was downgraded to a post-tropical cyclone from a hurricane in name only, swamped much of the US coast between North Carolina and New Jersey, prompting authorities to shut off electricity to millions in communities from Manhattan to small coastal villages.
More than one in six flights in the entire US has been cancelled since the weekend, many multinational companies from AT&T to PepsiCo have temporarily shut their headquarters, and millions of residents are shut indoors around the start of one of the busiest shopping seasons of the year, heralding a drag on a US economy struggling to recover.
NASDAQ and the NYSE have both been closed for two straight days – the first closures since the terrorist attacks of September 11, 2001 – and may close for a third day. ‘The US equities markets are closed Monday and Tuesday,’ the SEC says. ‘The SEC will remain in close consultation with the markets as the situation warrants.’
‘The time to evacuate is over,’ the municipal government said early Tuesday as much of the city suffered the storm’s pounding and reeled in darkness. ‘Residents are urged to stay indoors for the duration of the storm. All New York City public schools are closed on Monday and Tuesday.’
At least 16 people have died as a result of the storm, including seven people in New York City, at least one crew member of the historic replica HMS Bounty, which sank during the storm’s approach, and others who were hit by falling debris.
Insured losses due to the storm will likely total between $7 bn and $8 bn, said Charles Watson, research and development director at Kinetic Analysis Corp, in a telephone interview with New York-based Bloomberg News. Various levels of government would likely end up paying for the remainder of the damage – up to $20 bn, he said.
Watson added, however, that the amount of damage from a storm of this magnitude, measuring more than 1,000 kilometers across, is still hard to predict. ‘It kind of reminds me of Katrina: the actual wind damage from Katrina and coastal storm surge damage was easy to estimate,’ he said. ‘But once you start getting water going over your protective measures and getting into your infrastructure, the numbers start to go crazy.’
