US markets reopen after 2-day shutdown

US financial markets reopened Wednesday after a historic two-day closure forced by superstorm Sandy, which completely shut down the global financial center of New York. Even though much of New York City was still suffering the effects of power outages, flooding and wind damage, trade was smooth on the New York Stock Exchange and the Nasdaq exchange following the markets' first closure since the September 11, 2001 attacks. Bond, derivatives, option and foreign exchange markets were all back at work, though telecommunications and power outages continued to hamper many market participants. NYSE Euronext chief executive Duncan Niederauer told CNBC television that the exchange's systems were working smoothly, and that even with the power outages, the exchange could operate full-time on its own backup generators. "It's been very smooth... the market-making community is more than staffed enough to be open. It's nice to see the market up... so far so good," he said shortly after the opening bell. Trade opened heavy and stocks jumped after the two-day shutdown, only to turn downward as trading progressed. At 11:00 am, or 1500 GMT, the Dow Jones Industrial Average was down 3.03 points (0.02 percent) to 13,104.18. The broad-based S&P 500 lost 2.49 points (0.18 percent) to 1,409.45, while the Nasdaq was down 19.37 (0.65 percent) at 2,968.58. Ford Motor and General Motors shares were both up more than six percent after beating expectations in their quarterly earnings. Disney fell 2.1 percent after announcing it would buy "Star Wars" studio Lucasfilm for $4 billion. Facebook was 3.0 percent lower as the ban on employees selling their shares lifted. Insurance shares fell 1.2 percent as a group amid reports that the storm could leave behind as much as $15 billion in insured losses. Bond yields fell: the 10-year US Treasury eased to 1.74 percent from 1.75 percent late Friday, while the 30-year dropped to 2.87 percent from 2.92 percent. The financial industry seemed to weather the shutdown smoothly; the US Treasury said the payments, clearing and settlement infrastructure operated normally during the two days the markets were closed. The Treasury-led Financial Stability Oversight Council said Tuesday it would continue to monitor the markets as they reopened. The shutdown of two of the world's largest equity markets and associated futures and derivatives exchanges had impact beyond US borders. With US traders offline, many in the New York region facing power and communications outages and so unable to trade electronically, trading volumes plunged in Europe and elsewhere as well. Niederaurer defended the decision Sunday to halt trading completely for two days, which was done in consultation with the financial community and Washington regulators. "The human safety concerns trump all... The markets should not have been open, because for the markets to be open a bunch of people would have had to put their lives at stake. Anybody who wants to question that decision just isn't thinking clearly." While electronic trading could theoretically have taken place, he said, many market participants, hit by electricity and cellphone outages, would still not have been able to trade, he added.