Both literal and metaphorical floods poured into New York this week, seemingly confusing investors near and far as to what to do. Hurricane Sandy brought with it billions of dollars in lost economic revenue, 61 deaths (as of now), and has the potential to have a near-term negative effect on earnings for a lot of companies.
We were also flooded with three days' worth of earnings results, because many higher-profile companies postponed their earnings release until after the New York Stock Exchange reopened. Needless to say, investors are going to need more than one day to digest this influx of news, and it could be days before we have a clearer picture of Sandy's true toll on the economy and people's lives.
For the day, the broad-based S&P 500 (SNPINDEX:^GSPC) finished higher by a hair, 0.22 points (0.02%), to 1,412.16. Let's have a look at some of today's big movers.
Obviously, given the widespread nature of Sandy's destruction, it shouldn't come as a surprise that general contractors, automakers, and home furnishing companies cleaned up today.
Quanta Services (NYSE:PWR) is a contracted service company that repairs and upgrades electrical and power transmission lines. Considering that 7 million people are still without power, there's a really good chance that Quanta will see an uptick in business over the coming months. Quanta shares advanced 10% today.
Automaker Ford (NYSE:F) is another often-forgotten winner of large natural disasters in the U.S. that involve flooding. When a car is flooded, it's totaled by the insuring company, and a check is written to the car owner for the Blue Book value of the vehicle. Although there aren't any visible estimates yet, it's very probable that these insurance checks could fuel a new wave of car buying and boost Ford's already impressive domestic auto sales. It also doesn't hurt that Ford reported a quarterly profit of $1.6 billion, reversing a loss of $468 million last year. Ford shareholders enjoyed an 8% rally today.
In home furnishings, Leggett & Platt (NYSE:LEG) had a nice day, gaining better than 4% following Hurricane Sandy. Let's remember that, in addition to residential homes being flooded, countless businesses also suffered severe losses. Leggett & Platt serves both the commercial and residential side of the business, supplying products from shelving and counters, to bed frames. The company also reported third-quarter earnings on Monday that easily surpassed revenue and EPS projections. Finally, don't forget that Leggett & Platt also has an impeccable 41-year streak of boosting its dividend.
The disaster du jour of post-Sandy trading goes to Western Union (NYSE:WU), which collapsed 29%, after it reported disappointing third-quarter earnings results. Western Union reported third-quarter revenue which was $50 million below Wall Street's forecast, and lowered its earnings outlook to a range of $1.60-$1.63 from a previous outlook of $1.68 to $1.72. It appears that increased competition and a failure to innovate quickly enough to an increasingly digitized platform is hurting Western Union.
A new auto boom?
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As someone with family and friends on the East Coast, I also encourage you to donate to the American Red Cross or your favorite charity to help those less fortunate cope with this disaster. Thank you!