NYSE will stay closed; o'seas calm
Overseas markets rebounded and the dollar moved higher Wednesday, holding out promise that world markets will overcome Tuesday’s devastating terrorist attacks in New York and Washington, D.C.
London’s FTSE 100 gained 2.8% Wednesday after plunging 8.5% the day before. The CAC in Paris was up 1.2% and Frankfurt’s Xetra Dax gained 1.7%.
Meanwhile, the New York Stock Exchange will stay shuttered today; it will reopen as early as Friday but no later than Monday, NYSE chairman Richard Grasso said at a press briefing at Bear Stearns in midtown Manhattan.
Most on Wall Street predict later rather than sooner. When the opening bell chimes, they say, showbiz stocks may face a sour welcome. Theme parks could suffer — and blanket news coverage means higher ratings but lousy ad revenue in an already weak economic climate.
“It won’t open this week,” said one fund manager. “They’ve blocked off southern Manhattan. There are issues with communications infrastructure and even air quality,” he noted, as crumbled remains of the World Trade Center towers and scattered debris continue to smolder.
The NYSE, which averages $40 billion a day in trades, and Wall Street itself sit in the heart of the area of greatest destruction. Wednesday witnessed a gas leak, a secondary collapse at the south tower stump and the collapse of the remnants of nearby One Liberty Plaza.
The market hiatus could give panicky investors time to cool off. “From the point of view of our clients, we think it’s fine,” said another portfolio manager. “The more time people have to think about it, the less the knee-jerk reaction.”
Disney and Vivendi Universal, which have big theme-park operations, hope so. They’re likely to take a hit from the prospect of diminished tourism over the next few months amid safety concerns and rising gasoline prices.
These congloms and others have big news operations whose broadcast and cable programming will draw dramatically higher viewership. However, that’s almost bad news for at least a couple of days, as such fare is aired relatively commercial-free compared with normal network programming.
At the broadcast webs — including Disney’s ABC, Viacom’s CBS and General Electric’s NBC — the prospect of a disrupted launch to the all-important fall primetime season seems particularly jarring to investor confidence in the parent companies’ stocks.
Exhibs take a break
On the film side, the interruption of normal operations among movie-chain operators appears likely to be of short duration. A few planned releases probably will be pulled from distribs’ skeds. That shouldn’t hurt exhibs dramatically, but will do little to swell investor enthusiasm for Hollywood studio stocks.
Publicly traded theater chain AMC Entertainment said it will limit its annual shareholder meet today in Kansas City, Mo., to “core agenda items.”
“The thoughts and prayers of all AMC associates are with yesterday’s victims and their loved ones,” AMC chairman-CEO Peter Brown said. “There will be another time when we can better convey our enthusiasm about our company’s prospects.”
Vogel Capital Management’s Hal Vogel predicted recent events “will be an excuse for lower earnings in the third quarter” even as Wall Streeters watch closely for signs that a weakening U.S. economy may squeeze profits into next year.
Investors around the globe worry a retaliatory strike by the U.S. in the Middle East will jack up oil prices, despite promises by OPEC to keep world markets adequately supplied with oil.