Stocks waterlogged by Sandy's mounting costs
Waterlogged from superstorm Sandy and unmoved by a solid October jobs report, stocks fell sharply Friday. The Dow Jones industrial average dropped 139 points as details about the storm's costs began to trickle out.
Verizon Communications, whose downtown Manhattan facilities are still without power, said the storm would have a “significant” effect on its fourth-quarter earnings. Verizon said it could not yet estimate the cost of the storm, which downed cell towers across the region. Its stock fell 62 cents to $44.52.
“The information coming out from the economic impact of Sandy is a negative,” said Rob Lutts, president of Cabot Money Management in Salem, Mass. “I think the markets are trying to digest that and understand that, so there is a little bit of uncertainty.”
Insurers, the group that will feel the storm's effects most acutely, plunged en masse as analysts warned that the storm will eat into their income. Raymond James analysts lowered their estimates for Allstate; Barclays analysts cut theirs for Hartford Financial Services Group Inc.
The chairman of Hartford, Liam McGee, told investors on a conference call that the storm's costs are just beginning to come into focus. “It's much too early for us to provide data with any level of certainty,” McGee said. He said it wasn't until Thursday that adjustors were able to view the damage to Long Island, one of the hardest-hit areas.
Hartford fell 66 cents, or 3 percent, to $21.26. Allstate dropped 49 cents to $38.56. American International Group Inc. plunged $2.52, or 7 percent, to $32.68. Genworth Financial Inc. dropped 16 cents, or 3 percent, to $6.06.
After a day of steady selling, the Dow closed down 139.46 points, or 1.1 percent, at 13,093.16. The Standard & Poor's 500 index dropped 13.39, or 0.9 percent, at 1,414.20. The Nasdaq composite index lost 37.93 points, or 1.3 percent, to 2,982.13.
The day started with a burst of hope: In the last big piece of economic news before Tuesday's presidential election, the Labor Department said employers added 171,000 jobs last month, while the unemployment rate ticked up to 7.9 percent. More jobs were added in the previous two months than was first reported, the government said.
European stocks rose on the news and U.S. stocks opened higher. The Dow gained as much as 57 points in the first half-hour of trading. After that, the indexes commenced a steady slide.
All ten categories in the S&P 500 were lower by the end of the day.
Internet travel sites priceline.com and TripAdvisor Inc. were among the S&P 500's top gainers. TripAdvisor rose $5.71, or 19 percent, to $35.12. Priceline added $48.64, or 8 percent, to $634.74.
Starbucks rounded out the S&P 500's top three gainers, adding $4.22, or 9 percent, to $50.84.
The ubiquitous coffee vendor said late Thursday that global revenue at cafes open at least a year rose 6 percent during its fiscal fourth quarter, which runs from July through September.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Steelers notebook: Roethlisberger says Saints game is ‘must win’
- Steelers’ backups Archer, Harris ready to run
- Comeau’s hat trick leads Penguins; Crosby reaches 800 career points
- Turkey Trot runners turn out to burn calories despite chilly Pittsburgh temps
- PIT wants non-passengers allowed past security to shop
- Queen of crime writing P.D. James dies at 94
- Cosby made deal with National Enquirer to spike accuser’s story in 2005
- Starkey: Rutherford will add when timing’s right
- Defying the odds makes this Thanksgiving particularly poignant
- Pitt plays best game of the season in rout of Kansas State
- Pregnant woman struck by van in North Side dies; doctors save baby