Wall Street: Reaping the whirlwind?
The closed New York Stock Exchange is barricaded with sand bags during the arrival of Hurricane Sandy on October 29, 2012 in New York City.
Here's an interesting -- and not terribly comforting -- coincidence: Sandy shut down Wall Street this week on the anniversary of Black Tuesday, one of the key dates in the great stock market crash of 1929.
Some British investors may be feeling nervous. They have good reason to be fearful about the financial effects of hurricanes. In late October 1987, a huge storm closed the London stock market for a day and when it re-opened, it plummeted, falling by more than quarter in the following week.
London was not alone. Many other stock markets also crashed in 1987, including Wall Street. But London fell faster and further than most. Jeremy Batstone-Carr, of stock brokers Charles Stanley, says Britain’s great storm was a factor: “You’re talking about the impact on infrastructure, the impact on communications, the uncertainty caused by closure of markets.”
But Batstone–Carr says don’t hit the panic button yet. Conditions then and now are very different. And even after the Crash of '87 , the British stock market stabilized fast and rallied strongly.
Standard and Poor’s offers even more reassurance. The rating agency says that in the six months following the 13 costliest storms. The S&P 500 climbed by an average of 5.8 percent. Standard & Poor's says, “history tells us that hurricanes typically don’t trigger market declines.”