Analysts ponder Sandy's financial impact

The hurricane could help October retail sales, but some experts see a potential negative impact transportation and hotel stocks.

By Bruce Kennedy Oct 29, 2012 4:05PM

U.S. stock markets closed Monday as the Northeast braced for the full force of Hurricane Sandy's arrival. It is only the second time since 1985 that the American stock markets have closed on account of weather.

What kind of impact will Sandy have across other sectors? Analysts watching the storm’s approach are also watching and waiting to see.

While the markets could be closed for several days, depending on the hurricane’s damage, Yahoo Finance senior columnist Mike Santoli says in this video that they will bounce back quickly. The stock exchanges themselves and many public companies, he says, have had several days to prepare for the storm -- and to attend to such issues as putting off third-quarter earnings reports, if necessary.

"There's not going to be a lot of news that I think would otherwise be dramatically market-moving," he adds. "And also we ended (trading) with a whimper on Friday, too. So it wasn't really something that seemed like there was a lot of pent-up energy in there that had to go somewhere."

There's even a possibility Sandy could end up being beneficial, in terms of October retail sales figures. Closed sign -- Pete Barr-Watson, Flickr Open, Getty Images

Paul Walsh, vice-president of weather analytics for The Weather Channel, says the lead-up to the storm should actually help the usual suspects such as home-retail centers Home Depot (HD) and Lowe’s (LOW). Consumers had a weekend to prepare for the hurricane. And that preparation, he says, might actually create a retail bounce similar to what happened last year -- when the massive "Snowtober" storm paralyzed much of the northeastern U.S.

He also believes there were more shoppers in the mall this past weekend.

"I think there was probably a halo effect, because we're in fall," he says. "The predictions are that it's going to turn cold afterwards, so I think there was more benefit than would normally be in the middle of hurricane season, just simply because there's more people out shopping, and they were buying the things that they’re going to need."

But what's good for October may not be good for November. There's the potential of massive power outages in the highly populated Northeast during and after Sandy -- and those blackouts could last through the weekend, or even into the first several weeks of November, threatening that month’s sales figures.

The storm is also expected to have a long-lasting ripple effect in other sectors, such as air transportation. US Airways (LCC), American Airlines (AAMRQ), United (UAL), JetBlue (JBLU) and Delta (DAL) have been forced to cancel or delay flights due to Sandy -- and those disruptions are expected to create hundreds of millions of dollars in lost flight revenue.

FedEX (FDX) is also warning there might be delays in its ground and air shipments.

It could be a mixed bag for hotel chains such as Marriott International (MAR) and the InterContinental Hotels Group (IHG). Many of those hotels are filling up with would-be airline passengers stranded by Sandy, or people forced from their homes. But the storm is also prompting thousands of reservations to be canceled in New York City and other affected tourist attractions.

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Oct 30, 2012 8:28AM
Instead of worrying about how Sandy is going to impact stocks and the financial markets why don't these "analysts" worry about the millions of lives effected and the property damage.  Maybe all the Wall St traders should take the next month or so off and volunteer to help clean up NYC instead of trying to "clean up" on Wall St 
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