Gasoline rose for a third day and oil fell to a three-month low as Hurricane Sandy threatened U.S. East Coast refineries and closed equity trading. Treasuries and the dollar strengthened amid increased demand for refuge.
Gasoline futures jumped 2.1 percent in New York while oil fell 0.9 percent at 4 p.m. New York time. Ten-year Treasury note yields dropped three basis points to 1.72 percent in an abbreviated session. The Stoxx Europe 600 Index fell 0.4 percent as trading volume slumped. Standard & Poor’s 500 Index futures were 0.4 percent lower, while Canadian shares added 0.1 percent and Brazilian equities dropped 0.2 percent at 4 p.m. New York time. The euro depreciated 0.3 percent to $1.2901.
U.S. stock trading was canceled for a second day, joining bond markets, as 85-mile-per-hour winds and surging seas from Hurricane Sandy bore down on New York and paralyzed American capital markets. Some New Jersey refineries shut or reduced operations. German Finance Minister Wolfgang Schaeuble rejected another debt restructuring for Greece, while in Spain a slump in retail sales fueled concern about a deepening recession.
“For today the downward pressure from the slowing global economy will move to the background as Sandy and the impact it could have to the most populated portion of the U.S. evolves over the next several days,” Dominick Chirichella, senior partner at the Energy Management Institute in New York, said in a report.
The closing of stock trading for a second day was announced by NYSE Euronext after consultations with other exchanges. The Securities Industry and Financial Markets Association earlier recommended a full market close tomorrow in dollar-denominated fixed-income securities after they shut at noon New York time today. CME Group Inc. halted stock-index futures and options at 9:15 a.m. New York time.
CME said it will reopen trading of U.S. equity index futures and interest-rate products tonight starting at 6 p.m. New York time for overnight electronic trading. Equity index markets will close at 9:15 a.m. tomorrow, CME said in a statement.
The hurricane is forecast to make landfall early this evening in southern New Jersey, according to an advisory from the National Hurricane Center in Miami.
Exchanges are planning to reopen Oct. 31, weather permitting, according to statements from NYSE Euronext and Nasdaq OMX Group Inc. The last comparable closure of the New York Stock Exchange was on March 12 and 13, 1888, when a blizzard dumped 21 inches of snow on New York, according to the company’s website. The exchange was closed for about 1 1/2 days after a snowstorm in February 1978.
Yields on Treasury 10-year notes fell to almost a two-week low in the abbreviated session. Treasury volume reported by ICAP Plc, the largest inter-dealer broker of U.S. government debt, fell to $81.79 billion, the lowest volume since December 2011, from $243.96 billion on Oct. 26 in New York.
Treasuries were also supported on speculation that Greece will need to restructure its debt, and before a report this week that economists predict will show the U.S. jobless rate climbed in October. The Federal Reserve postponed its open market operations until Oct. 31.
Consumer spending in the U.S. rose 0.8 percent in September, more than forecast, after a 0.5 percent gain the prior month, a Commerce Department report showed today.
The euro approached the lowest level in almost three weeks, touching $1.2885, amid a growing divide over Europe’s new bailout strategy. It reached $1.2883 on Oct. 26, the lowest level since Oct. 11. Retail sales in Spain dropped 11 percent in September from a year ago, a report showed, and the nation’s central bank set up a so-called bad bank.
Germany’s Schaeuble rejected another debt restructuring for Greece. Euro-area finance chiefs are scheduled to talk three times in the next two weeks as the 17-nation bloc grapples over ways to fill Greece’s financing gap and ease concerns that it might have to exit from the euro.
The Canadian dollar weakened below parity with its U.S. counterpart for the first time since August as risk appetite shrank and global stocks and commodities declined.
The Japanese yen gained against 10 of 16 major counterparts, strengthening 0.1 percent against the euro. It slipped 0.2 percent against the dollar.
The Stoxx 600 (SXXP) fell for the first time in four days, with the number of shares changing hands 47 percent less than the 30- day average, according to data compiled by Bloomberg. Insurers declined the most among 10 industry groups. Munich Re, the world’s largest reinsurer, lost 2 percent, and Swiss Re AG, the second biggest, slipped 2.5 percent.
Travelers Cos., the sole insurer in the Dow Jones Industrial Average, lost 0.7 percent in German trading. Allstate Corp., a U.S. home and auto insurer, dropped 0.6 percent.
More than 10 companies postponed their earnings announcements due to the hurricane, according to data compiled by Bloomberg. Pfizer Inc., the world’s biggest drugmaker that’s originally scheduled to announce results tomorrow, said it will report on Nov. 1.
Office Depot Inc., the second-largest U.S. office-supplies chain, moved its reporting date to Nov. 6 while McGraw-Hill Cos. and Thomson Reuters Corp. said separately that they will announce results on Nov. 2.
ThyssenKrupp AG retreated 3.7 percent, the most in a month. Germany’s biggest steelmaker asked companies to resubmit offers for its unprofitable Americas unit after deciding the original bids were too low, people familiar with the matter said.
UBS AG (UBSN) rallied 7.3 percent. Switzerland’s largest bank will cut as many as 10,000 jobs companywide as the trading business shrinks, a person with knowledge of the plan said. Serge Steiner, a spokesman for the bank in Zurich, declined to comment.
Italian bonds fell as the government sold 8 billion euros ($10.3 billion) of bills before the outcome of a regional vote in Sicily that may signal the direction of forthcoming national elections. Berlusconi said on Oct. 27 the government’s policies were deepening the recession. The yield on Italy’s 10-year bond increased 11 basis points to 5.02 percent.
Spanish bonds also dropped, with the yield on 10-year notes rising seven basis points to 5.64 percent. Spain’s bad bank will buy foreclosed assets at an average discount of 63 percent as the state seeks investors to become shareholders in the 60 billion-euro ($77 billion) facility, the nation’s bank-rescue fund said.
Spain is setting up the bad bank, a mechanism also used in Ireland, to help lenders that receive state aid shed real estate that has plunged in value. The creation of the vehicle is a condition of a European bailout of as much as 100 billion euros for Spain’s banking industry agreed to in July.
Germany’s 10-year yield slipped below 1.5 percent for the first time since Oct. 16. The Markit iTraxx Europe index of credit-default swaps linked to 125 investment-grade companies increased three basis points to 132, the highest in more than two weeks.
Phillips 66, NuStar Energy LP and Hess Corp. said they are shutting or reducing output at New Jersey refineries as a precaution against the hurricane. Gasoline for November delivery climbed 5.77 cents to $2.7568 a gallon in New York. November heating oil increased 0.6 percent to $3.1152 a gallon.
Natural gas rose 2.1 percent, the first gain in four days. Copper dropped 1.6 percent and oil slipped 74 cents to $85.54 a barrel in New York. All trading was electronic as the Nymex floor was closed for the storm.
Brazil’s Bovespa index slipped 0.2 percent. Oil company Petroleo Brasileiro SA fell 3.4 percent as its third-quarter profit sparked concern that corporate earnings will fail to pick up as analysts anticipated.
Canadian shares were little changed, with the Standard & Poor’s/TSX Composite Index (SPTSX) adding 0.1 percent, erasing an earlier decline at the close of trading. Intact Financial Corp., which provides home, automobile and business insurance in Canada, declined 1.9 percent with southern Ontario in the potential path of Sandy.
The MSCI Emerging Markets Index (MXEF) declined for a second day, sliding 0.1 percent. The Shanghai Composite Index sank 0.4 percent and Russia’s Micex Index lost 0.2 percent. India’s Sensex added less than 0.1 percent.
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