THE GREAT STORM OF ’96 : Record Snow in East Socks It to Wall Street
The East Coast’s record-breaking snowstorm overwhelmed financial markets Monday, prompting major stock and bond markets to open late and close early.
Stock markets opened at 11 a.m. Eastern time, 1 1/2 hours later than usual, and closed at 2 p.m., two hours early, as blizzard conditions closed airports indefinitely, paralyzed highways and kept most traders and brokers at home.
The market managed a mixed performance for the day, with blue-chip shares up modestly and smaller stocks losing ground.
Trading in U.S. government securities, corporate bonds and mortgage securities all ceased at noon Eastern time. Yields finished little changed.
The storm and frigid temperatures also inspired traders worldwide to bid up crude oil prices to eight-month highs.
Meanwhile, the weather and staff shortages closed several New York futures exchanges, delayed the government’s weekly Treasury bill auction and interfered with dozens of other financial operations.
Among the effects were slow international currency markets, because New York banks could not complete transactions, and fewer daily reports of asset values by mutual fund companies.
Nonetheless, the Dow Jones industrial average gained 16.25 points to finish at 5,197.68, boosted in part by rising energy stocks and by Lockheed Martin Corp.’s surprise takeover bid for Loral Corp. But New York Stock Exchange volume totaled just 130 million shares in the abbreviated session.
The last time the NYSE shut early was Feb. 11, 1994, when it closed 90 minutes before the normal time because of snow.
Monday was also marked by death as William Weyer, 55, a trader with brokerage Henderson Bros., collapsed on the floor of the NYSE from a heart attack before the delayed start of trading and died en route to the hospital.
While many analysts dismissed Monday as a throwaway session because of the low attendance and volume, they also cheered the generally positive tone, at least among big stocks.
Rising issues topped losers by 13 to 9 on the NYSE.
“We had a positive advance-decline line. The breadth confirmed the Dow rally,” said Paul Rabbitt, senior quantitative analyst at Oppenheimer & Co.
But Brian Belski, a market analyst for Dain Bosworth Inc. in Minneapolis, said Monday’s gains continued last week’s cautious posturing, as many investors turned to so-called defensive issues.
“The market is setting itself up for a correction,” Belski said. “People are sticking with the same themes as last week, selling technology stocks and moving into defensive areas” such as oil, gold, drug and food stocks--sectors that are considered safer to own during market downturns.
Continued weakness in tech shares shaved the Nasdaq composite index, which eased 1.10 points to 1,032.37.
In commodity trading, oil prices rose past eight-month highs in London and shares of energy companies advanced as the blizzard was seen as boosting demand for heating oil. Heating oil prices were back up near three-year highs.
Any rise in heating oil demand, however, will probably be met with some drop in demand for other refined oil products such as gasoline, which is used less during a storm. But spot jet fuel prices rose 8.5% to nearly 71 cents a gallon in New York.
The New York Mercantile Exchange, which trades crude oil, heating oil and gasoline futures, was closed because of the blizzard. But in the physical market, benchmark West Texas intermediate crude oil for February delivery was quoted at about $20.45 a barrel, up about 35 cents from Friday’s close and near levels last seen in May.
Heating oil for February delivery in New York Harbor soared to be notionally quoted at about 62.50 cents a gallon, up about 1.90 cents from Friday’s close, though prices were difficult to calculate with Nymex closed, traders said.
In currency trading, the dollar rose slightly against the German mark and Japanese yen by early afternoon, when trading virtually ground to a standstill.
“Most of the banks in New York don’t have enough staff to fully accommodate the interbank market and it is very difficult to do much,” said Dan O’Connell, vice president of institutional foreign exchange at First Chicago.
The dollar was trading at about 1.4390 marks at 3 p.m. Eastern time Monday, up from 1.4385 on Friday. Against the yen, the dollar rose slightly to 105.35 from 105.30.
Among the market highlights:
* Defense shares surged after Lockheed Martin said it would acquire most of Loral in a deal that values the defense electronics maker at $45.50 a share. Loral soared 8 1/4 to 44 1/2 and Lockheed leaped 2 7/8 to 80 1/4.
The deal, which comes a week after Westinghouse sold most of its defense electronics business to Northrop Grumman for about $3 billion, renewed speculation about more post-Cold War consolidation in the industry.
Among other active defense stocks, Boeing rose 1 3/4 to 80 1/4, Litton added 1 3/4 to 47 1/8 and United Technologies gained 1 1/8 to 94 1/8.
* Energy stocks rising included Exxon, up 1 to 84 3/8; Unocal, up 5/8 to 30 1/4; Occidental Petroleum, up 1/2 to 22 3/8; and Sonat, up 3/4 to 34 5/8.
* Hilton Hotels was up 1 5/8 at 65 after brokerage Salomon Bros. raised its rating on the company to “buy” from “hold.” MGM Grand also gained, up 1 to 28 7/8.
* Drug stocks were broadly higher. Warner-Lambert gained 1 3/8 to 96 1/8, Johnson & Johnson rose 1 1/8 to 87 7/8 and Merck was up 7/8 to 63 7/8.
* On the downside, Alcoa sank 3 to 52 3/8 after reporting surprisingly weak fourth-quarter earnings per share of 85 cents, compared with $2.07 in the year-ago period.
Alcoa is one of the first major companies to report its quarterly results, and the negative surprise raised concern about other potential earnings disappointments.
* In the battered tech sector, FileNet lost 3/4 to 44 3/4, Micron Technology fell 1/2 to 38 5/8 and Uunet Technology sank 2 1/4 to 53 3/4.
In foreign trading, London’s FTSE-100 reached another record high, gaining 0.4%. But Frankfurt’s DAX index finished lower, and Tokyo’s Nikkei index dipped 0.5%.
Market Roundup, D7
* BIG BLIZZARD: The East Coast is paralyzed for a second day as the fierce storm buries cities knee-deep in snow. A1
