Most U.S. stocks rose, with the Standard & Poor’s 500 Index reversing an earlier loss, as equity markets in the world’s largest economy reopened after Hurricane Sandy caused the longest weather-related shutdown since 1888.
Home Depot Inc. and Lowe’s Cos. added at least 2.2 percent amid speculation the home-improvement retailers would be helped by spending related to the storm. General Motors Co. rallied 9.5 percent after reporting third-quarter profit that surpassed analysts’ estimates. Apple Inc. (AAPL) dropped 1.4 percent after Chief Executive Officer Tim Cook embarked on a sweeping management overhaul at the world’s most valuable company.
The S&P 500 rose less than 0.1 percent from Friday’s close to 1,412.16 at 4 p.m. in New York, after falling as much as 0.4 percent. The gauge declined 2 percent in October after four straight months of gains. The Dow Jones Industrial Average lost 10.75 points, or 0.1 percent, to 13,096.46 today. Almost three stocks rose for every two that fell on U.S. exchanges, as volume was about 6.31 billion shares, or 5.7 percent above the three-month average.
“Today, traders are more heightened to a flash crash more than any day prior,” Rick Fier, director of equity trading at Conifer Securities LLC in New York, said in a phone interview. His firm oversees $8 billion in assets. “Nobody cares about if the market goes up or down. You just want to make sure the market is functioning properly.”
American equity markets were closed Oct. 29 and yesterday, the first consecutive shutdowns because of weather in more than a century. The decision to open U.S. markets was announced in statements by NYSE Euronext, Nasdaq OMX Group Inc. and Bats Global Markets Inc.
The New York Stock Exchange opened its market on time by running on backup power from generators. Brokers on the NYSE floor experienced limited Internet and mobile-phone connections while still being able to trade from the exchange.
Trading went “very smoothly, everything opened fairly quickly,” Duncan Niederauer, the chief executive officer of NYSE Euronext, said in an interview with Bloomberg Television’s Matt Miller. “Participation has been a lot more active than we thought,” he said. “For some it was business as usual, for some they were using their backup sites.”
Knight Capital Group Inc. (KCG), one of the largest U.S. market makers, shut down trading of equities after backup power failed at its headquarters in Jersey City, New Jersey, amid a blackout following the storm. No new orders for stock trades were being accepted, according to a memo from Knight, which almost went bankrupt in August after a computer error flooded the market with unintended transactions. The stock added 0.4 percent to $2.63, after tumbling 8.4 percent earlier in the day.
The longest weather-related U.S. trading suspension in 124 years left money managers with one day instead of three to adjust their holdings before the fiscal year ended for more than 20 percent of them. The closure of American exchanges during Hurricane Sandy occurred during the last week of the fiscal year for 1,521 U.S. mutual funds, according to data compiled by Morningstar Inc.
A business activity gauge from the Institute for Supply Management-Chicago Inc. increased to 49.9 this month from 49.7 in September. A reading of 50 is the dividing line between expansion and contraction. The median estimate of 54 economists surveyed by Bloomberg forecast it would rise to 51.
The Labor Department will issue its monthly employment report for October as scheduled on Nov. 2, a spokesman said today. Payrolls increased by 125,000 workers in October and the jobless rate rose to 7.9 percent, according to the median forecasts of economists surveyed by Bloomberg.
The jobs report is the last before the Nov. 6 presidential election, and may help sway voters trying to decide between giving President Barack Obama another four years in office or to change course with Republican challenger Mitt Romney.
ADP Employer Services, which is scheduled to release its monthly employment data tomorrow, revised its September result to an increase of 88,200 jobs from 162,000, based on a new methodology. Economists estimate companies added 135,000 jobs this month, according to a Bloomberg News survey.
Investors are also watching corporate results. Some 24 companies in the S&P 500 were due to report earnings today, according to data compiled by Bloomberg. Profit has exceeded projections at 72 percent of companies to have released third-quarter results, while sales trailed estimates at 60 percent of firms, Bloomberg data show.
Hurricane Sandy may reduce economic output by $25 billion in the fourth quarter, according to Gregory Daco, a U.S. economist at IHS Global Insight in Lexington, Massachusetts. That could lower the fourth-quarter pace of growth to between 1 percent and 1.5 percent, from an estimate of 1.6 percent, he said.
Utility, financial and industrial companies rose the most among 10 S&P 500 industry groups, climbing at least 0.4 percent, while health-care and technology shares retreated more than 0.5 percent.
Home Depot, the largest U.S. home-improvement retailer, climbed 2.2 percent to $61.38, while Lowe’s rose 3.3 percent to $32.38.
General Motors (GM) rallied 9.5 percent to $25.50. The largest U.S. automaker reported a third-quarter profit that surpassed analysts’ estimates by more than 50 percent and said it wants to break even in Europe by mid-decade.
Ford Motor Co. (F) advanced 8.2 percent to $11.16. The second-largest U.S. automaker reported its 14th consecutive profitable quarter as its North America unit delivered record earnings that made up for higher taxes and losses in Europe.
Quanta Services Inc. (PWR), the biggest U.S. power line contractor, rose 9.9 percent to $25.93 as earnings beat expectations and damage from Sandy brought the company more work.
Genworth Financial Inc. (GNW) climbed 8.8 percent to $5.96. The insurer beat third-quarter estimates and posted a narrower loss at the unit backing home loans. Acting Chief Executive Officer Martin Klein said the company plans to sell businesses to raise funds that can be used to cut debt and buy back shares.
The Nasdaq Composite Index dropped 0.4 percent to the lowest level since Aug. 3. Apple fell 1.4 percent to $595.32 on the first trading session since Apple announced the departure of mobile software head Scott Forstall and retail leader John Browett.
Western Union Co. (WU), the world’s biggest money-transfer business, plunged 29 percent to $12.73 after cutting its profit forecast for 2013.
Walt Disney Co. slipped 1.9 percent to $49.12. The world’s largest theme-park company agreed to buy George Lucas’s Lucasfilm Ltd. for $4.05 billion in cash and stock, adding “Star Wars” and “Indiana Jones” to its roster of movies. The first of a new trilogy of “Star Wars” films will be released in 2015, Disney said.
Netflix Inc. (NFLX) surged 14 percent to $79.24. Billionaire Carl Icahn acquired almost a 10 percent stake in the operator of the largest online video streaming service, and is considering ways to maximize value.
Opnet Technologies Inc. jumped 31 percent, the most since 2000, to $42.05. Riverbed Technology Inc. (RVBD) announced on Oct. 29 that it agreed to acquire the software-products company in a transaction with an equity value of $1 billion, expanding its offerings to help businesses manage computer networks. Riverbed, the maker of computer-networking products, slipped 18 percent to $18.47.
PVH Corp. (PVH) surged 20 percent to $109.99, the highest level since at least 1980. The owner of the Tommy Hilfiger brand agreed to buy Warnaco Group in a $2.9 billion transaction, creating a company with $8 billion in sales and bringing all Calvin Klein-branded apparel under one roof in the biggest clothing-industry deal announced this year.
Warnaco had licensed Calvin Klein’s jeans from PVH, which bought Calvin Klein’s company from the designer in 2003. Shares of Warnaco soared 39 percent to $70.58.
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