Sandy could cause $45B hit to U.S. economy
New York Stock Exchange shuts down ahead of superstorm
- 7,000 U.S. flights cancelled
- NYSE to close Monday and Tuesday
New York's financial centre is effectively shut down in anticipation of hurricane Sandy, a powerful storm with the potential to seriously disrupt functioning in the world's largest economy.
The New York Stock Exchange and rival exchange operators Nasdaq OMX Group and CME Group jointly decided to shut down on Monday, as the storm nears landfall and threatens as many as 60 million people on the U.S. eastern seaboard.
Floor trading had previously been announced before Sunday, when the exchanges extended the shutdown to include electronic trading.
On Monday afternoon, the NYSE announced it plans to remain closed on Tuesday, too. It's the first time the stock exchange has been closed for two consecutive days for weather-related reasons since 1888. That time, the cause was a massive blizzard that left 12-metre snowbanks in parts of the city.
Wider impact than Irene
The shutdown came on the heels of New York citizens facing mandatory evacuations from designated zones starting Sunday night.
As of 10 a.m. eastern time on Monday, the eye of the storm was roughly 500 kilometres offshore.
As much of 25 per cent of the U.S. economy could be affected, which could mean up to $45 billion in losses, business professor Peter Morici said.
"Hurricane Sandy will have a devastating impact on life and property," Morici said Monday. He notes that the last U.S. storm with a comparable impact was likely hurricane Irene in August 2011.
Estimates for Irene's impact at the time were roughly $7 billion in losses, but the final toll ended up being closer to $20 billion, Morici noted. "It seems likely that Sandy will impose greater destruction of property," he said.
But he added that disasters like that tend to be followed by a round of spending on rebuilding infrastructure, which can have a stimulative effect on the economy.
"Disasters can give the ailing construction sector a boost, and unleash smart reinvestment that actually improves stricken areas and the lives of those that survive intact," he said.
More than 7,000 U.S. flights have already been cancelled, and Toronto-based Porter Airlines announced that all flights in and out of that city's island airport as of 3 p.m. on Monday afternoon had been cancelled. All the airline's flights in and out of Boston, Washington and Newark airports have also been cancelled, Porter said in a release.