Local stocks are trading modestly higher at lunchtime in the East, despite falls on the Canadian and European markets overnight. All US markets were closed due to Hurricane Sandy, which is currently bearing down on New York City. It's expected US markets will also close tonight (Tuesday) - which will be the first time bad weather has forced the closure of the NYSE for two consecutive sessions since 1888. The last time a Hurricane closed the NYSE for one day was in 1985. Nearing lunchtime in the East, the All Ordinaries Index (XAO) is up 7.2pts or 0.2pct to 4506.6.
A security guard walks past the New York Stock Exchange in New York (Reuters)
There's a lot of focus on insurance stocks due to Sandy, with fears the storm could be one of the most expensive in history. CNBC reported damages could come in around US$3 billion. Insurer QBE (QBE) - which operates in the Americas, is down 1.3pct in early trade to $13.02 while IAG (IAG) is lower by 0.4pct to $4.54.
Elsewhere, Virgin Australia (VAH) is making headlines. VAH has purchased a 60pct stake in Tiger Airways for $35 million, and offered $98.7 million for regional carrier SkyWest (SXR). SXR shares have shot up 53.6pct in early trade to $0.43. Meanwhile Singapore Airlines has snapped up a 10pct stake in VAH, sending its share price up 5.4pct to $0.485.
Economic data released today has shown yet another fall in new home sales. According to the Housing Industry Association, home sales fell 3.7pct in September, with most of the weakness caused by falls in detached housing sales. The HIA says the ongoing weakness in the housing industry should prompt the Reserve Bank to deliver another rate cut next week on Melbourne Cup Day.
The Australian dollar remains fairly steady against the greenback, although risk aversion was strong amongst currency traders overnight due to Hurricane Sandy. At lunchtime in the East, the AUD is worth US103.39c, £0.6451 and €80.06c.
The Dow Futures market has been open for a brief time this morning and is down 100pts, suggesting a fall of 0.8pct if US markets were to reopen before the storm completely passes.
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