* Revenues from U.S. companies disappoint
NEW YORK, Oct 29 (Reuters) - U.S. stock index futures fell
in a shortened session on Monday and cash equity trading was
canceled as powerful Hurricane Sandy bore down on the U.S. East
Coast while renewed uncertainty in Europe hurt sentiment.
All U.S. stock markets were closed on Monday and may remain
closed on Tuesday, the operator of the New York Stock Exchange
said, depending on the damage from the huge and dangerous storm
on financial center New York City overnight and on Tuesday.
Index futures stopped trading electronically at 9:15 a.m. (1315
GMT) and will stay shut until further notice.
Sandy, a mammoth storm, took aim at the most densely
populated U.S. Northeast Coast on Monday, forcing hundreds of
thousands to seek higher ground, halting public transport and
closing schools, businesses and government departments.
Italian political turmoil and Spanish hesitancy over
seeking euro zone assistance put the two countries on the front
line of the region's debt crisis and back under market pressure
on Monday as their leaders met in Madrid.
"We have an illiquid market, we have a risk-off situation
from overseas and we have some issues going on in the States
with Sandy, so that is impacting things a little more than
expected," said David Lutz, managing director of trading at
Stifel Nicolaus Capital Markets in Baltimore.
Lutz was tracking markets from his home in Annapolis,
Maryland, a coastal town near Washington D.C. that is expected
to escape the worst of the storm surge as Sandy makes landfall
"I do have a lot of customers that are still in, whether
they're in New York City or overseas," he said. "I think a fair
amount of people are probably logging in from home just because
at this point in time there's a lot of information gathering for
us U.S. traders," he said.
S&P 500 futures fell 4.9 points and were below fair
value, a formula that evaluates pricing by taking into account
interest rates, dividends and time to expiration on the
contract. Dow Jones industrial average futures fell 69
points and Nasdaq 100 futures fell 15.75 points.
Futures closed well off their lows of the session when S&P
500 futures fell more than 10 points. Futures will not reopen as
usual during the day, including the popular S&P 500 e-mini
contract that allows smaller traders to access index
Frank Lesh, a futures trader at FuturePath in Chicago, said
he is expecting his day to be much quieter than usual as the
e-mini is his firm's biggest contract, but he is continuing to
trade other futures contracts such as copper, soybeans and
"I guess it's going to be a quiet day," said Lesh. "We don't
know if we're going to reopen tonight. I guess they're going to
follow the lead of New York."
E-mini contracts typically trade around the clock, closing
for just 45 minutes of each day.
If the market closure continues for more than a day it may
start causing problems for investors who need to trade in and
out of positions, investors said.
"If you go two days, you really start to create some serious
financial stress for some players that need to get something
done," said Jim Paulsen, chief investment officer at Wells
Capital Management in Minneapolis. "A two-day closure will
create more stress and therefore will allow electronic trading.
That's my best guess."
CME Group closed its interest rate operations, including
Treasury, Eurodollar and fed funds futures and options on
futures markets on the trading floor at 12:00 noon on Monday in
line with a closure of the cash market.
In Europe, Spanish and Italian bond yields rose and German
Bund futures hit two-week highs on Monday, partly prompted by
former Italian Prime Minister Silvio Berlusconi's threat to
bring down the Rome government.
Greece's foreign lenders have refused to make any further
concessions on changes to labor laws contested by a junior
coalition partner, the country's finance minister said on
Sunday, prolonging an impasse on a crucial austerity package.
Athens has been locked in talks with its EU and IMF lenders
on the austerity package for months, but a final agreement has
been held up by the small Democratic Left party's refusal to
back the new wage laws.
Weaker revenues have been a concern this U.S. earnings
season. Just 36.9 percent of S&P 500 companies so far have
reported revenue that beat forecasts, compared with the 62
percent that typically exceed expectations, according to Thomson
Reuters data as of Friday.
Stocks slid last week, following a series of weak results,
especially from U.S. multinational companies. For the week, the
Dow fell 1.8 percent, the S&P 500 lost 1.5 percent and the
Nasdaq dropped 0.6 percent.
The S&P 500 index is off nearly 4 percent since a peak in
September and the index has fallen below its 50-day moving
average, a closely watched momentum indicator. Some analysts are
now looking to the 100-day moving average as the next area of
support at 1,396.8. The index closed at 1,411.94 on Friday.
European shares fell for the first time in four sessions on
Monday, hit by worries over weak company results. The
FTSEurofirst 300 index fell 0.4 percent to 1,093.23
points and the euro zone's blue-chip Euro STOXX 50 index
fell 0.7 percent to 2,477.62 points.
Canadian ETFs traded in Toronto that hold U.S. equities or
are exposed to U.S. indexes, such as the Horizons S&P 500 Index
C$ Hedged ETF, are available to trade. Some ETFs will
be ineligible for subscriptions or redemptions. Horizons ETF
warned that the bid/ask spread could be abnormally wide.