After a two-day shutdown caused by Hurricane Sandy, Wall Street will be back in business this morning as experts tally the storm's damage — a figure that could reach as high as $50 billion — and worry about ripple effects on the economy.
"There will be no Halloween costumes on the New York Stock Exchange when the market opens back up because there will be a great deal of tension just in terms of restarting the markets and making sure ... trading goes smoothly," said Peter Andersen, senior portfolio manager at Boston-based Congress Asset Management. "Other than, say, repairing their roofs, money managers have had two additional days to be thinking about portfolios and the stocks they're in, and they may have changed their opinions in the past two days of certain stocks."
Nationwide, Hurricane Sandy could end up costing as much as $20 billion in property damage and up to $30 billion more in lost business, the forecasting firm IHS Global Insight predicted yesterday. Last year's Tropical Storm Irene caused $4.3 billion in insured losses, according to the Insurance Information Institute.
IHS said the short-term blow to the economy could shave about 0.6 percentage point from U.S. economic growth in the October-December quarter, given the hits to retailers, airlines and home construction firms.
"It's going to be felt in the New York City/New Jersey area where they got devastated," said Elliot Winer, chief economist for the Northeast Analyst Group. "In Massachusetts, it's probably not going to be any different than any bad storm that comes in for a day and people don't go out."
Teams from the Massachusetts Emergency Management Agency fanned out across the state yesterday to assess the damage caused by Sandy, which knocked out power to about 370,000 Bay State households and businesses on Monday.
"We don't know yet if there's enough damage to qualify for (federal) aid," said MEMA spokesman Peter Judge. "The damage has to be large and widespread, with schools closing for the better part of a week and nursing homes having to be evacuated. Those things we're not seeing yet."
As stores reopened and workers returned to their jobs, hurricane damage claims poured into insurance companies yesterday. By mid-afternoon, Eastern Insurance Group had received nearly 200 claims, mostly related to tree and roof damage, said claims manager Roy Grafton.
"These are the types of events that test an insurer's value," said Glenn Greenberg, a Liberty Mutual spokesman.
Greenberg would not disclose how many claims the company had received but said it had several hundred employees handling claims coming in by phone.
Fannie Mae and Freddie Mac said they will offer help to borrowers whose homes were damaged or destroyed, who live in designated disaster areas and whose loans the mortgage giants own or guarantee.
Barbara Anthony, undersecretary of the Massachusetts Office of Consumer Affairs and Business Regulation, urged people to photograph any damage to their property, shop around for a contractor, ask for references and a written estimate, make sure their insurer will pay for the work, keep all of their receipts and call the state's insurance hot line (1-877-563-4467) with any questions.
Herald wire services contributed to this report.
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