Wall Street suffers in quake aftermath
US stocks fell in the wake of Japan’s devastating earthquake yesterday, but other than specific industries such as nuclear power, the broad impact on equities was expected to be short-lived.
Trading volume was unusually low compared with other sell-offs, coming in at 7.68bn shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year’s daily average of 8.47bn. The recent pullback in stocks had been accompanied by high volume.
“I’m encouraged that we’re seeing lighter volume on a down day since that could suggest less enthusiasm for selling,” said Hank Herrmann, chief executive of Waddell & Reed Financial.
Nuclear power stocks fell after explosions at a Japanese plant. The Market Vectors uranium and nuclear energy exchange traded fund slumped 12 per cent while the Global X Uranium ETF sank 17 per cent. But the Market Vectors Solar Energy ETF of alternative energy shares climbed 7.2 per cent.
Shaw Group sank 9.2 per cent to $34.87 in the session while Camec dropped 13 per cent to $32.62 on the New York Stock Exchange. Both nuclear power companies traded on volume that was more than 10 times their 10-day average.
General Electric, which has combined nuclear ventures with Hitachi, dropped 2.2 per cent to $19.92 and was the top percentage decliner on the Dow.
“This is a knee-jerk reaction, but it could put a lid on building new nuclear plants,” said James Dunigan, chief investment officer at PNC Wealth Management.
Japanese ports handling about seven per cent of the country’s industrial output sustained major damage, disrupting the flow of goods globally.
The Dow Jones industrial average was down 51.24 points, or 0.43 per cent, at 11,993.16. The Standard & Poor’s 500 Index was down 7.89 points, or 0.60 per cent, at 1,296.39. The Nasdaq Composite Index was down 14.64 points, or 0.54 per cent, at 2,700.97. Texas Instruments fell 2.2 per cent to $33.80 in extended-hours trading after the chipmaker said it will lose revenues due to production delays at its Japanese facilities from quake-related interruption of power.
US-listed shares of Japanese companies declined and the BNY Mellon index of leading Japanese American Depositary Receipts lost 5.3 per cent. Toyota Motor, which said it would suspend production at all its Japanese car plants, fell 4.6 per cent to $81.73 yesterday.