Hurricane Irene: Wall Street planning to open Monday

The less-than-anticipated damage from Hurricane Irene came as somewhat of a relief to Wall Street.

On Sunday, the New York Stock Exchange and Nasdaq OMX Group issued statements saying they planned to be open Monday, but officials and Wall Street analysts warned that it was not clear how much trading activity there would be.

New York Mayor Michael R. Bloomberg said he was lifting the city’s evacuation order as of Sunday afternoon, but the subway and commuter rail systems remained closed and it was unclear when they would reopen.

New York Gov. Andrew Cuomo had shut the subway as a precaution before the arrival of the storm, which caused some flooding in Manhattan streets, including in the Wall Street district.

“It’s safe to say it’s going to be a tough commute tomorrow,” the mayor told reporters Sunday.

The last time weather shut U.S. equities markets for an entire day was Sept. 27, 1985, as a result of Hurricane Gloria.  A heavy snowstorm on Jan. 8, 1996, caused the New York Stock Exchange to open late and close early.

John Nester, spokesman for the Securities and Exchange Commission, said Sunday that the exchanges had informed the SEC that they would open for regular hours. “The decision to open was made in consultation with the SEC following a series of discussions throughout the weekend,” Nester said in a statement.

Overall, the economic toll from Irene is anticipated to be far less severe than had been feared. Kinetic Analysis Corp., a consulting firm, estimated that insured damage from Irene will run from $2 billion to $3 billion, with total losses of about $7 billion.

Certain sectors may feel that economic bite more acutely than others. Atlantic City, which had been banking on this weekend to be one of the year’s best turnouts by gamblers, shut down its casinos before the hurricane’s arrival. Though the gambling halls are expected to reopen Monday, Bob Griffin, president of the Casino Association of New Jersey, told reporters that it’s still uncertain how much the three-day shutdown will have cost the industry.

Irene also put a significant dent in this week’s box office revenue.

About 1,000 movie theaters from Philadelphia to New York had shut down over the weekend because of  the storm. Studio distribution executives blamed these closures, as well as people staying home because of the storm, for a decline of nearly 25% in movie ticket sales over the weekend compared with the same period a year ago.

New York City’s theater industry also was buffeted by the storm. Citing safety and security concerns, the Broadway League shut down all Broadway shows on Saturday and Sunday. While the shows would normally be closed on Monday, some theater watchers expected performances to resume Tuesday.

Hurricane Irene 2011: Upstate New York, Vermont Face Major Flooding

As Hurricane Irene travels northward, leaving the major cities of New York and Washington in better shape than anticipated, new dangers are arising for the remote and rural portions of upstate New York and Vermont, where massive flooding has already devastated several small communities.

Throughout upstate New York's Catskill Mountains, several small towns have been completely submerged by floodwaters, which have roared down the region's many rivers and streams.

Much of the land in the area was already waterlogged when Irene arrived, dumping another 10-15 inches of rain.

The local news website Watershed Post has kept a running tally of local reports of "devastation" in the small towns in the region.

In Windham, for instance, news sources and images linked on the site have depicted a scene of "total destruction," with most houses in the low-lying parts of town covered to their roofs in water. The town has been "wiped out," in the words of Windham Fire Chief Michael Scarey, according to the Mid Hudson News.

Commenters on the site have described a rapidly deteriorating situation, with the local emergency services reportedly being completely overwhelmed by the number of people in need.

Financial Markets Will Be Open Monday After Dodging Worst of Irene’s Wrath

U.S. stock, bond and commodity markets will open as usual tomorrow after Manhattan was spared the worst of Hurricane Irene, avoiding the first shutdown due to weather since 1985.

NYSE Euronext (NYX), Nasdaq OMX Group, Bats Global Markets and Direct Edge Holdings LLC -- the largest operators of equity exchanges in the world’s biggest capital market -- sent statements saying they plan normal trading sessions tomorrow. The Securities Industry and Financial Markets Association recommended no change to bond-market schedules, and CME Group Inc. (CME) said the New York Mercantile Exchange will open.

“Exchanges had prepared for the worst, and thankfully the worst didn’t materialize,” Chris Isaacson, the chief operating officer at Bats, said in a phone interview. “The U.S. securities industry is very resilient,” he said. “Because of the electronification of markets, most systems are not dependent on humans being there.”

While the public face of U.S. equity trading is the New York Stock Exchange in Manhattan, about 13 percent of the nation’s volume took place on that venue in the past year. Almost all of the rest is handled electronically, with orders matched in data centers in New Jersey and elsewhere.

Storm Surge

Irene struck New York City with winds of 65 miles (105 kilometers) an hour, the National Hurricane Center said in a special advisory at 9 a.m. local time. A storm surge of 3.8 feet was reported at New York Harbor and total water levels of almost 8.6 feet, or moderate-stage flooding, were reported at Battery Park City in lower Manhattan before receding, the hurricane center said.

“It wasn’t as bad as expected,” said Brian Pfeffer, chief operating officer at Direct Access Partners LLC, a New York- based brokerage with about 20 employees that work on the NYSE trading floor, in a phone interview today. “I don’t see a problem with trading tomorrow at all.”

Direct Access tested systems last night and was told by the management company that its office building where 60 more employees work, 40 Wall Street, would be open, Pfeffer said. He expects to drive to work tomorrow from Manalapan, New Jersey, or take a ferry if the Holland Tunnel isn’t operating normally.

“As for Monday, my plans are to leave around 3 a.m. to be sure to get in early and check with NYSE and our systems people,” Doreen Mogavero, chief executive officer of Mogavero Lee & Co., who trades on the NYSE floor, said in an e-mail today. “As long as systems are good and phone lines are up it should be business as usual.”

Subways Shut

The storm forced New York Governor Andrew Cuomo to shut New York City’s transportation system and prompted Mayor Michael Bloomberg to evacuate low-lying areas.

With trading poised to resume as normal, the focus of securities professionals turned to travel as New York City’s subways remained closed and flooding and debris affected train routes. The Metropolitan Transit Association, which operates lines serving the largest U.S. city, resumed limited bus service in the afternoon. It hadn’t disclosed as of 7:12 p.m. when subways will begin. Parts of the MTA’s Connecticut and New York rail lines may have “substantial damage,” the agency said.

New Jersey Transit will operate on a modified schedule tomorrow, it said in an e-mailed statement. Crews are assessing storm damage and will make necessary repairs, and commuters should not expect a normal day, it said.

“It’s safe to say it’s going to be a tough commute” tomorrow, the mayor said during a press conference today. He is the majority owner of Bloomberg News parent Bloomberg LP.

Hurricane Gloria

Hurricane Gloria, on Sept. 27, 1985, was the last time weather shut U.S. equities markets for an entire day. On Jan. 8, 1996, the New York Stock Exchange opened late and closed early after a snowstorm dumped 22 inches (55.9 centimeters) of snow on the city by dawn.

Stock trading stopped for four days after the Sept. 11, 2001, terrorist attacks on the World Trade Center in Manhattan. The most recent shutdown was on Jan. 2, 2007, to observe a national day of mourning for former President Gerald R. Ford, who died on Dec. 26, 2006.

“Post 9/11, we and other markets spent a great deal of time getting ready and building emergency disaster recovery-type functionality,” Eric Noll, an executive vice president for transaction services at New York-based Nasdaq OMX, said during an interview yesterday.

Irene causes heavy flooding in Vermont

Hurricane Irene plowed into Vermont on Sunday causing heavy rain, flash floods and wind gusts of up to 60 mph, leaving some residents stranded and others rushing to higher ground. 

The soil was already saturated from a wet spring and soaking rains just last week.

Irene arrived quicker than expected and its unpredictabile path made it difficult to determine the areas where residents should be evacuated, said Mark Bosma, a spokesman for Vermont’s Emergency Operations Center.

 “We didn’t know where the storm was going to hit,” Bosma said. “Vermont being so mountainous –- you never know if it’s going to fall on the east side of the mountains or the west side of the mountains. It could come spilling down either side. Evacuations beforehand just weren’t possible.”

He added that some individual towns began evacuating before the flooding started. 

“The National Weather Service told us that all major rivers and streams had the potential to flood –- many of them have, and are, and probably will still going into the evening,” Bosma said.  

 Emergency management officials began getting calls about “massive flooding”  before 9 a.m. Sunday. A 20-year-old woman was swept away in the Deerfield River in southern Vermont and is presumed dead.

 Some of the worst flooding was along the Winooski River, which begins in Cabot and flows about 90 miles to Lake Champlain. The Winooski was getting dangerously close even to the state’s emergency management center in Waterbury:

“I’m looking behind us and it’s starting to creep toward us,” Bosma said.

State authorities' main focus was evacuating residents in flooded areas. Swift water rescue teams responded to calls throughout the day Sunday, and the National Guard brought in high water trucks that were dispatched upstate.

“Even with all those assets we haven’t been able to get to everyone yet,” Bosma said. “Some people have just had to wait it out until the water subsided.”

Bosma said residents from low-lying areas were being advised to stay with friends who live on higher ground, “but on the other side of the coin, if you don’t need to be on the roads — stay off the roads.”

 “People are becoming stranded on the road when they hit floodwaters,” Bosma said, “and there just aren’t enough emergency responders to get to everyone.” 

Cleanup Under Way to Restore Power to Millions

Thousands of repair workers began clearing tree branches and repairing electrical lines to restore power to almost 6 million U.S. homes and businesses after Hurricane Irene left a trail of destruction from North Carolina to Maine.

The recovery effort will take days, and in some cases weeks, as flooding from Irene’s torrential rains still threatens electrical infrastructure, said Philip Bediant, a professor of civil engineering at Rice University in Houston.

Nearly one million customers lost power in New York, where Irene made landfall yesterday, according to a 1 p.m. report from New York Governor Andrew Cuomo’s office. Irene did not pack the hurricane force winds that were predicted for the region.

“It could have been a lot worse in terms of storm surge, could have been worse in terms of the actual wind speeds,” Bediant said. “It did not strengthen like they originally thought.”

Falling trees dragged down power lines while a storm surge flooded substations, cutting electricity supplies to 471,000 customers on Long Island, said Michael Hervey, chief operating officer of Long Island Power Authority, during a conference call with reporters.

Power disruptions affected almost 6 million homes and businesses in 13 states and the District of Columbia, the U.S. Energy Departmentsaid in a report yesterday. Irene first hit the coast of North Carolina as a Category 1 hurricane Aug. 27. More than 800,000 customers were without power in Virginia and Maryland, and about 116,000 in Maine, the Energy Department said.

Gloria and Isabel

Downgraded to a tropical storm yesterday as the tempest moved through New England on its way to Canada, Irene drew comparisons to Hurricanes Gloria in 1985 and Isabel in 2003. Hurricane Gloria, which followed a similar path in 1985, left 750,000 customers without power in Long Island, Hervey said.

Damage was lighter in New York City, where Mayor Michael Bloomberg allowed residents evacuated from low-lying areas to begin returning yesterday afternoon after the storm passed. The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.

About 120,000 Consolidated Edison Inc. (ED) customers were without power at 6:45 p.m. local time, said Chris Olert, a company spokesman. About 52,000 homes and businesses in Westchester County were without power, while outages were reported in Queens, Staten Island, Brooklyn and the Bronx.

Two-part Event

Consolidated Edison expects to restore power to most of its New York City customers by late on Aug. 30, and to most of its Westchester customers by the end of Sept. 1, Olert said.

“This was a two-part event for Con Edison -- water and wind,” John Miksad, the company’s senior vice president of electric operations, said on a conference call with reporters yesterday.

Hervey of Long Island Power couldn’t say when repair work will be completed. The company is assessing wind damage to downed high-voltage lines, and possible tornado and flood damage to infrastructure across Long Island.

About 1,500 of the utility’s workers were scouting damage on Long Island yesterday as 2,000 linemen and tree-trimmers began to restore power, Hervey said. Long Island Power is requesting additional workers from its peers in states not affected by Irene.

“I just don’t know how long it will take,” Hervey said of the repair effort.

Second-worst Storm

About half of the 2.4 million customers Dominion Resources Inc. serves in Virginia and North Carolina lost power, making Irene the second-worst storm in the company’s history after Hurricane Isabel in 2003, said Chet Wade, a company spokesman, in a telephone interview.

Irene’s eye-wall winds lashed the eastern edge of Dominion’s service area, while tropical-storm force winds pounded Richmond for about 12 hours Aug. 27, before the storm sped up the coast over night, Wade said.

“It was close to its peak in wind speed and it stayed the longest” over Virginia, Wade said.

By 8 p.m., Dominion had reduced the number of customers without power to 738,000 from 1.2 million. The more than 6,000 workers deployed in the repair effort focused first on restoring power to hospitals and other public health and safety facilities, the Richmond, Virginia-based company said in an e- mailed statement.

The company will have a damage report and assessment of how long it will take to restore power by noon today, Wade said.

Maryland Power Losses

More than 611,000 Baltimore Gas and Electric Co. customers lost power during the storm and its aftermath, said company spokeswoman Rachael Lighty in a telephone interview. About 700,000 customers lost power during Isabel.

“We were prepared for the worst and that’s pretty much what we got,” Lighty said.

Two nuclear reactors, one in New Jersey and one in Maryland, were shut by the storm. None of the reactors in the storm’s path lost power from the grid as of noon, the U.S. Nuclear Regulatory Commission said.

One of the two reactors at Constellation Energy Group Inc. (CEG)’s Calvert Cliffs nuclear station in Lusby, Maryland, shut automatically when the plant was hit by wind-driven debris. The plant’s second reactor is operating at full capacity.

Exelon Corp. (EXC)’s Oyster Creek plant in Toms River, New Jersey, shut Aug. 27 in anticipation of hurricane-force winds, Exelon said in a statement.

Pennsylvania and Connecticut each had more than 600,000 customers with no electricity, and there were more than 810,000 in New Jersey with no power as of 3 p.m. local time, according to the Energy Department report.

New Jersey Cleanup

Public Service Electric & Gas Co., which provides power to nearly three-quarters of New Jersey, was preparing to send about 6,000 workers to begin restoring power to 375,000 customers without electricity as of 7:30 p.m. local time, Deann Muzikar, spokeswoman for theNewark, New Jersey-based utility, said in a telephone interview. The effort should take five to seven days as workers repair downed power lines as well as underground natural-gas distribution equipment damaged by flooding, she said.