Hurricane closes Wall Street for first time in decade

Wall Street markets shut for the first time since September 11, 2001, forcing Gulf investors to turn to alternative methods to trade stocks.

Sandbags are placed around the perimeter of the New York Stock Exchange as Hurricane Sandy looms on the horizon. US stock exchanges were closed yesterday and may remain so today. Carlo Allegri / ReuteShow more

Markets in the United States have faced many a crisis, some of them described as a "perfect storm" over the past few years. But that was about the battering inflicted by the global financial crisis. Not until Hurricane Sandy appeared on the horizon were Wall Street traders actually prevented from trying to make a buck.

Yet even the closure of US stock exchanges - for the first time since the September 11, 2001 attacks - has failed to sandbag investors completely.

NYSE Euronext and Nasdaq both closed their US stock exchanges yesterday, while the Securities Industry and Financial Markets Association recommended a closure of US bond markets. American markets may also remain closed today.

For those truly determined customers seeking to trade during the closures on Wall Street, there were a number of options available, said Tom Connolly, the regional head of asset management at BNY Mellon.

"Normally they would be [trading] stocks in ETFs," he said. Those ETFs, or exchange traded funds, listed on European exchanges were still open for trading.

"They could also trade futures, of course," added Mr Connolly. "More sophisticated clients definitely would, but most would be trading through a US account."

Trading in depositary receipts of US firms listed in Europe was also still possible.

Credit markets were likely to be more resilient, since investment banks typically trade bonds and sukuk with each other directly, said Mark Watts, the head of fixed income at National Bank of Abu Dhabi.

"Unlike the equity markets, the bond market is a decentralised over-the-counter market, which essentially means that the close of a physical trading room does not mean a closure of the market," he said.

"We expect the market to suffer from low volumes of trading as there are simply less people making it into the office to trade."

As The National went to press last night, Hurricane Sandy was expected to make landfall near Atlantic City in New Jersey.

The largest storm ever recorded in the Atlantic forced flood defences to be strengthened across much of the east coast.

Shareholders of European insurance companies braced for the worst, with the Euro Stoxx Insurance Price Index falling 1.4 per cent to 147.46.

US equity futures fell, pointing to a lower open when markets eventually resume trading. S&P 500 futures were trading 0.4 per cent below their equity counterparts last night.

Other bourses owned by the US operators overseas, such as Euronext and Nasdaq Dubai, remained fully functional.