Economic Outlook: 'Frankenstorm' closes in

It was a very rare development in New York: Stock markets closed Monday because of Hurricane Sandy barreling up the East Coast.

Stock markets almost never close outside of their limited holiday schedule, which recognizes only the grandest and most deeply rooted national holidays. Only the majors: Christmas, the Fourth of July, Thanksgiving, New Years Day and the like stop the wheels of commerce from turning in the nation's financial capital.

Markets, of course, were taken off-line after the Sept. 11, 2001, terrorist attacks.

The monster storm (some are calling it "Frankenstorm" ) expected to hit New York City Tuesday morning had already caused the city to close its mass transit system -- something also rarely done before a weather event.

In a Catch-22 of Big Apple proportions, the city ordered hundreds of thousands of residents to evacuate their homes, then closed down the bus and subway systems that might allow them to do that.

Hurricane Sandy was expected to raise seawater levels by up to 11 feet, which could flood the city's subway system.

The nation's largest school system was also shuttered on Monday, affecting 1.1 million students and up to twice that many parents. Many schools have already been set up as emergency shelters.

Sandy is the second big storm to threaten the city in 14 months. Hurricane Irene had slowed to a tropical storm level by the time it hit New York, and even that created a 4-foot-high ocean surge that flooded parts of lower Manhattan.

The final word comes from National Oceanic and Atmospheric Administration, head of environmental protection, which called the storm "the worst-case scenario" for both New York City and parts of New Jersey.

Some of the city's residents said they were nervous while others said they were excited.

Mayor Michael Bloomberg said, "This is a serious and dangerous storm." And the National Hurricane Center warned that the potential floods were "life-threatening."

The federal government is ready to pitch in. President Barack Obama has already signed a declaration of emergency, which allows federal agencies to help where they can.

In international markets Monday, the Nikkei 225 index in Japan shed 0.04 percent and the Shanghai composite index in China lost 0.35 percent. The Hang Seng index in Hong Kong was off 0.16 percent and the Sensex in India was flat, rising 0.06 percent.

The S&P/ASX 200 in Australia rose 0.1 percent.

In midday trading in Europe, the FTSE 100 index in Britain dropped 0.37 percent while the DAX 30 in Germany shed 0.49 percent. The CAC 40 in France fell 0.92 percent and the Stoxx Europe 600 gave up 0.5 percent.