Storm brings economy of US East Coast to a halt

October 29, 2012 6:14 pm


A sailboat smashes on the rocks after breaking free from its mooring on City Island, New York/AFP
WASHINGTON, Oct 29 – The massive storm bashing the US East Coast froze commerce, shut down stock exchanges for the first time since the 9/11 attacks and idled millions of workers Monday, laying siege to an economy still trying to get out of first gear.

With the coast from North Carolina to Massachusetts threatened by furious winds and a potentially devastating storm surge, businesses closed, refiners shut down operations and insurers girded for a leap in damage claims.

The New York Stock Exchange and the Nasdaq market closed completely on Monday, and the NYSE said it would not reopen until Wednesday, “conditions permitting.”

It was the first full trading shutdown since the 9/11 attacks closed US equity markets for four days in 2001, and the first full NYSE shutdown due to weather since September 1985, when it closed for a day for Hurricane Gloria.

Disaster estimator Eqecat forecast that Hurricane Sandy could cause up to $20 billion in damages, only half of them insured, as it strikes land around New Jersey and collides with another front.

“Sandy is a large storm, impacting 20 percent of the US population,” Tom Larsen, senior vice president, said in a statement.

That could hit an economy that has been largely struggling to gather pace, with economic growth at just 2.0 percent in the third quarter and the government struggling to overcome an unemployment rate of 7.8 percent.

The storm also comes as President Barack Obama battles a strong challenge from Republican Mitt Romney, with the November 6 election offering voters a choice between the very different economic plans mapped out by the two.

Four major economic centers — New York, Philadelphia, Baltimore and Washington — were largely closed down, with mass transit and flights curtailed or halted completely, businesses shuttered and many office employees forced to work from home.

Banks like Bank of America and Goldman Sachs — located in low-lying areas of Manhattan that were ordered evacuated in the face of a flooding threat — shut their doors and transferred crucial operations to other offices.

Many companies expected to announce quarterly earnings put off the release, including Pfizer, McGraw-Hill and Thomson-Reuters.

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