Massive Losses Likely From Hurricane Sandy

Morning Business Memo

The multi-billion dollar insurance losses from Hurricane Sandy could be larger than anyone expected before the massive storm blew ashore. It may take weeks to assess the damage from widespread flooding and destruction in the east. More than ten states have been directly affected. The National Flood Insurance Program will step in to pay for some of the damage. Preliminary estimates are that Sandy will be a lot more expensive than last year's Hurricane Irene, which according to one finding cost nearly $16 billion. The worst damage came from Hurricane Katrina in 2005. It cost $108 billion and caused 1,200 deaths.

Stock trading is closed for a second straight day. Bond trading will also be closed. It is the first time since 1888 that the exchange will have been closed for two consecutive days because of weather.

Transportation is at a standstill in the Northeast. Airlines grounded thousands more flights today, stranding travelers as far away as Europe and Asia. Amtrak says it's canceled all service today in the Northeast because of high winds and heavy rains. Cargo container operations were suspended in the normally busy ports of New York and northern New Jersey.

Many large companies have postponed the release of their quarterly earnings reports. Before the approach of Hurricane Sandy the Conference Board delayed the release of its October Consumer Confidence survey. The Labor Department says it still plans to release the monthly jobs survey on Friday. That will be the last employment report before next week's election.

Japanese cars are still the most reliable brands on the road, according to Consumer Reports. Toyota's Scion, Lexus and Toyota brands took the top three spots and the Toyota Prius C, a subcompact hybrid, got the best overall score in the magazine's annual reliability survey. Mazda, Subaru, Honda and Acura were close behind. The rankings attempt to predict the reliability of 2013 model-year vehicles based on surveys of Consumer Reports' readers. This year, 800,000 people submitted information on 1.2 million vehicles from the 2010 to 2012 model years.

The rankings are important for auto companies, since Americans frequently cite Consumer Reports as a main source of car-buying advice. Ford and Lincoln, once top performers, plummeted to the bottom of this year's rankings because of persistent problems with touch screens and bumpy transmissions. Ford was also hurt because three normally reliable models ' the Ford Escape, Ford Fusion and Lincoln MKZ ' are all new for 2013, so Consumer Reports couldn't predict their reliability. Also near the bottom were Chrysler Group's Chrysler, Dodge and Ram brands, which have been getting a fast makeover since partnering with Italy's Fiat three years ago. Consumer Reports says models with more features and more powerful engines, like the V-8 versions of the Chrysler 300 and Jeep Grand Cherokee ' had the most issues. The best-performing U.S. brand was Cadillac, from General Motors.

Richard Davies Business Correspondent ABC NEWS Radio ABCNews.com twitter.com/daviesabc

Losses Estimated at $45 Billion

Andrew Burton/Getty Images

With about one-fifth of the U.S. affected directly by Hurricane Sandy, tragic human loss reached 69 in the Caribbean, and U.S. economic losses could range around $35 billion to $45 billion.

However, those losses in consumer and business spending as much of the East Coast shuts down for safety reasons, will not likely be permanent economic losses, said Peter Morici, former chief economist with the U.S. International Trade Commission.

Read More: ABC News' coverage of Hurricane Sandy

In fact, there could be a net gain in U.S. GDP two years from now due to a boost in employment and activity for rebuilding efforts. The U.S. economy grew at an annualized rate of 2 percent in the third quarter, according to an initial estimate by the Commerce Department released last week.

Morici said the $12 billion in estimated consumer and business spending losses are actually delayed or displaced, depending on how essential many of the items are.

'People are going to buy clothing anyway,' he said.

In Washington, D.C., yesterday, Morici said few people were out on the streets as most of the federal government shut down.  The New York Stock Exchange and other financial markets temporarily shut down to protect workers from traveling and working in affected areas.

While brick and mortar stores are shutting down, Morici said the reconstruction will likely add jobs after the hurricane hits.

'People would make purchases they wouldn't normally make because of repairs,' he said.

Because the U.S. employment situation is in a precarious situation, with a 7.8 percent national unemployment rate, there will likely be additional spending in construction and related sectors.  Morici said there could be $15 billion to $20 billion in new direct private spending.

As a result, the economic benefit from reconstruction could range from $27 billion to $36 billion after a multiplier effect in the economy.

'We'll see people able to work who were not working,' he said. 'If the country was in full employment, it would be a different thing.'

Morici said early estimates of Hurricane Irene's direct damage in August 2011 were in the range of $7 billion. But Hurricane Irene's damages totaled $15 billion to $20 billion.

Hurricane Sandy is likely to have a greater economic affect, with at least two days of lost commercial activity.

Superstorm Sandy: Live Updates

9:51 AM EDT:  Sewage at a rate of 2 million gallons  per hour is spilling the into the main stem of the Little Patuxent River in Savage, Md. State officials say a power outage at a water reclamation plant is responsible.

9:47 AM EDT: Watch Live, Pa Gov. Tom  Corbett press conference.

9:35 AM EDT: Most Amtrak train service in the Northeast remains suspended.

9:16 AM EDT: Lower Manhattan 'Before and After' Hurricane Sandy.

9:06 AM EDT: High Tide at the Battery in New York City.

9:00 AM EDT: Over 15, 773 flights have been cancelled as a result of Sandy. Delta and Jet Blue plan to resume flights to Washington, D.C. airports sometime today. All four New York City area airports remain closed.

7: 55 AM EDT: Con Edison is reporting 684,000 customers without power in the New York City area.

7:21 AM EDT: The storm surge moved a 170-foot-long tanker to land in Staten Island, New York.

7:13 AM EDT: The Associated Press is reporting that Sandy is responsible for 17 deaths in seven states.

6:55 AM EDT: A spokesperson for NYU Medical Center tells WABC's Stacey Sager that the hospital is still assessing the outage and its cause(s). The hospital has eight different generators, including at least one on a higher floor. They do not think they all went out but if in fact some are still working, it is not enough to power the whole hospital.

John Minchillo/AP Photo

6:33 AM EDT: A spokesperson for Pennsylvania Emergency Management Agency tells ABC News's Matthew Jaffe that a second person has died from the storm.

6:13 AM EDT: Atlantic City has a boil water advisory for all residents and all shelters are filled to capacity.

6:02 AM EDT: President Obama has signed disaster declarations for New York and New Jersey.

5:49 AM EDT: A levee was breached overnight in Bergen County, N.J., according to Bergen County OEM PIO, Gina Jeanne Beratta. Minor injuries have been reported and rescue efforts are underway. Beratta says that hundred of people will need to be rescued.

5:00 AM EDT: PSE&G tells WABC that New Jersey has more than 2.3 million power outages.

3:44 AM EDT: FDNY says over 50 homes have been destroyed by the Breezy Point fire. It has been upgraded to a six-alarm fire. As of last count, there were 198 firefighters on the scene.

3:37 AM EDT: The FDNY now says 15 buildings are on fire in the Rockaways.  Fire officials say the fire is difficult to fight because of heavy winds and the houses are close together. No people have been pulled out of houses and 145 firefighters are working the scene.

3:05 AM EDT: Nearly five million without power after Hurricane Sandy. New Jersey has been the hardest hit with more than 1.9 million without power.

1:55 AM EDT: MTA Chairman Joe Lhota said that seven subway tunnels under the East River flooded during the storm. It is not yet known when service will be restored. The Hugh L. Carey Tunnel (aka Brooklyn-Battery Tunnel) is flooded and the Queens Midtown Tunnel also took on water, Lhota said in a statement.

1:45 AM EDT: More than 10 houses are on fire in Breezy Point, Queens and the western end of the Rockaway peninsula, according to the FDNY. The FDNY has more than 100 firefighters on the scene but are having trouble reaching the fires because of the flooding. No reports of any injuries at this time.

1:17 AM EDT: ABC News' Jim DuBreuil sent this photo of a fire in the Breezy Point section of Brooklyn, N.Y.

ABC

1:00 AM EDT: At least 13 deaths in the U.S. blamed on Sandy, according to the Associated Press.

12:45 AM EDT: CLICK HERE for the full story on the evacuation at NYU Medical Center.

WABC

12:24 AM EDT: Sloan Kettering Hospital spokesman Chris Hickey confirmed to ABC News' Gitika Ahuja that it is receiving 26 adult patients from NYU, at their request. Hickey said she didn't know whether they had been admitted yet or what their conditions were.

12:22 AM EDT: Parts of lower Manhattan lose power after explosion at power station.

12:07 AM EDT: About 200 patients have been moved out of NYU Medical Center by private ambulances with assistance from the fire department.

All US Exchanges Close Before Sandy

All major U.S. stock and options exchanges will remain closed Monday with Hurricane Sandy nearing landfall on the East Coast, the first unplanned shutdown since September 2001.

There had been plans to allow electronic trading to go forward Monday on the New York Stock Exchange, but with all mass transit shut down in and out of Manhattan, the risks were determined to be too great.

The Nasdaq and the CME Group in Chicago will also close. CME Group's Nymex headquarters and New York trading floor are located in a mandatory evacuation zone in Manhattan. Its New York trading floor will be closed, but electronic markets were functioning.

Benchmark oil for December delivery fell 61 cents to $85.67 a barrel.

The New York Stock Exchange could remain closed Tuesday as well, depending on the severity of the storm. If that should occur, it would be the first time since 1888 that the weather caused a two-day shutdown.

The cause then was a blizzard that left drifts as high as 40 feet in the streets of New York City.

On Monday, areas around the Financial District were part of a mandatory evacuation zone, with the storm surge from Sandy expected to push waters into portion of lower Manhattan.

Dow Jones industrial futures slid 90 points to 12,955. The broader S&P futures gave up 10.3 points to 1,397.30. Nasdaq futures fell 22.50 points to 2,636.50.

Some companies are also postponing quarterly earnings reports scheduled for release early this week. So far, that includes Pfizer Inc. and Thomson Reuters.

Burger King reported on schedule, and said its third-quarter net income fell 83 percent as revenue was hurt by the stronger dollar. Adjusted results topped expectations, however.

The Commerce Department also released its monthly consumers spending report Monday.

Consumer spending increased 0.8 percent in September. That followed a 0.5 percent gain in August and was the best showing since February. Personal income rose 0.4 percent, an improvement from a slight 0.1 percent gain in August and the best gain since March.

It's a closely watched indicator as consumer spending drives about 70 percent of the nation's economic activity.

NYC Nanny Not Herself Before Killings

Friends and relatives of Yoselyn Ortega, the New York City nanny accused of stabbing two young children to death, said she appeared to be struggling emotionally and financially recently. Few, though, could offer any explanation for what might have caused her to attack the children.

"She snapped," the nanny's sister, Celia Ortega, told The New York Post. "We don't understand what happened to her mind."

Yoselyn Ortega, 50, remained hospitalized Saturday from self-inflicted stab wounds, including a deep gash to her throat.

Police said Marina Krim, the Manhattan mother who employed Ortega, returned to her Upper West Side apartment Thursday to find two of her children, ages 2 and 6, dead of knife wounds and the nanny stabbing herself with the blade.

Yoselyn Ortega's motive remains a mystery, even to those who knew her, but a picture of a life in distress has begun to emerge in the days since the killing.

"Apparently over the last month she was not herself," said police department spokesman Paul Browne.

But relatives in Ortega's native Dominican Republic said they were shocked by the allegations.

Miladys Ortega, the nanny's older sister in the Caribbean nation, told The Associated Press on Saturday that her sister "loved those children." She said the family felt the nanny was "unable to do that."

"Yoselyn is fair, loving, loving with those children. She loved them," Ortega said at the family home in Santiago de los Caballeros, about 150 miles north of the capital, Santo Domingo. She spoke as she prepared to attend Mass after visiting the grave of their mother.

She said the Krims had visited the Dominican Republic last February with Yoselyn and stayed at her home in a middle-class district of Santiago.

"Those children were here," Miladys Ortega said tearfully. "They were happy, running, playing."

She said Yoselyn is the youngest of six siblings, most of whom live in the United States. Her sister emigrated to the United States in the early 1980s after graduating from accounting studies at Santa Ana College in Santiago.

Yoselyn Ortega worked as the manager of a print shop in Manhattan, until she separated from the father of her child. She returned to Santiago for a while, but then went back to the U.S., her sister said.

Miladys Ortega said that when her sister got back to New York, she couldn't find an accounting job and decided to work as a nanny because she loves children.

During her last conversations with Yoselyn, her sister didn't say anything that seemed unusual.

"Yoselyn always was a normal person. When she was a child, she played, always played a lot. We would go into the countryside," she said. "As an adult, she dedicated herself to working. She was always working."

Juan Pozo, a 67-year-old car service driver who formerly rented a room from the Ortega family, told The New York Times that the nanny's sister told him Friday that she had "felt like she was losing her mind" lately, and had recently been taken by relatives to visit a psychologist.

Police said they were unaware of any significant history of psychological problems for Ortega, but were investigating whether she had recently sought treatment.

Neighbor Ruben Rivas told reporters she seemed to have suddenly aged in recent weeks and had lost weight. Other friends said that while she was paid well by her domestic employers, Kevin and Marina Krim, and seemed happy with her job, she had suffered a financial setback when she had to give up an apartment she had rented in the Bronx, and recently moved back in with her sister.

William Krim, grandfather to the slain children, told the Times he wasn't aware of any conflicts between the family and the nanny.

"We're just the most stunned people in the world. I mean, they treated this woman so well," he said.

Hurricane Sandy to Put 50M People at Risk

Residents up and down the East Coast are preparing for what forecasters predict could be the worst storm in two generations as Hurricane Sandy is strengthening, putting 50 million people at risk.

The eye of Sandy is forecast to make landfall late Monday night in Atlantic City, N.J., bringing with it life-threatening storm surges, forceful winds and rainfall that could cripple transportation and leave millions without power. But the force of the storm was already evident as powerful winds and high seas already began lashing the coast Sunday night.

The size and power of the storm are almost without equal as several systems will combine to wreak havok on a large section of the nation -- from North Carolina to New England as far west as the Great Lakes.

Hurricane Sandy: Live Storm Tracker

Hurricane Sandy's maximum sustained winds increased to 85 mph overnight. As of 5 a.m., Sandy was centered about 385 miles southeast of New York City, and moving north at 15 mph, according to the National Hurricane Center.

On the East Coast, a storm surge is expected along a 600-mile stretch of the Atlantic along with rainfall in places of 6 to 10 inches and even more, and waves 20 to 25 feet are possible on the south side of Lake Michigan Monday night into Wednesday.

"We want to prepare people for the worst," New Jersey Gov. Chris Christie said Sunday, warning that some residents could be without power for more than a week.

As of 6 a.m. today, Jersey Central Power and Light was reporting 4,671 customers without power in northern New Jersey, according to ABC News' New York station WABC-TV.

Christie urged people in the path of Hurricane Sandy to "remain calm and listen to instructions."

Hurricane Sandy: Live Updates

A wind gust of 64 mph was recorded just south of Wilmington, N.C., shortly before 5 a.m. today. The highest rainfall total recorded was almost six inches in Dare County, N.C.

Tens of thousands of people in coastal areas have been ordered to evacuate their homes before Hurricane Sandy pounds the eastern third of the United States.

States of emergency were declared from North Carolina to Connecticut. Coastal communities in Delaware were ordered to evacuate by 8 p.m. Sunday night, and all non-emergency vehicles were ordered to stay off the state's roads beginning at 5 a.m. Monday.

"While the predicted track of Hurricane Sandy has shifted a number of times over the last 24 hours, it has become clear that the state will be affected by high winds, heavy rainfall, and flooding, especially along the coastline for a several day period," Delaware Gov. Jack Markell said. "These factors, along with the potential for power outages, have convinced me that the prudent thing to do is have people leave most of our coastal communities."

Sandy is expected to bring potentially life-threatening storm surges on the coast, ranging from several feet to potentially as high as 11 feet in the Long Island Sound area of New York, said Rick Knabb, director of the National Hurricane Center.

Hurricane Sandy: Full Coverage

Sandy will meet up with cold front coming from the northwest and a high pressure system from Greenland, fueling it with enough energy to make it more powerful than the so-called "Perfect Storm" in 1991, meteorologists say.

"The size of the storm is going to carve a pretty large swath of bad weather," Knabb said. "This is not just a coastal event."

The first rainfall from the megastorm already began to hit the coast of Virginia, Delaware and New Jersey Sunday night and forecasters warn it could bring inland flooding around Maryland and Pennsylvania. A blizzard warning was issued for portions of West Virginia, where Sandy could bring up to two feet of snow.

US Superstorm Threat Launches Mass Evacuations

Forget distinctions like tropical storm or hurricane. Don't get fixated on a particular track. Wherever it hits, the rare behemoth storm inexorably gathering in the eastern U.S. will afflict a third of the country with sheets of rain, high winds and heavy snow, say officials who warned millions in coastal areas to get out of the way.

"We're looking at impact of greater than 50 to 60 million people," said Louis Uccellini, head of environmental prediction for the National Oceanic and Atmospheric Administration.

As Hurricane Sandy barreled north from the Caribbean ' where it left nearly five dozen dead ' to meet two other powerful winter storms, experts said it didn't matter how strong the storm was when it hit land: The rare hybrid storm that follows will cause havoc over 800 miles from the East Coast to the Great Lakes.

"This is not a coastal threat alone," said Craig Fugate, director of the Federal Emergency Management Agency. "This is a very large area."

President Barack Obama was monitoring the storm and working with state and locals governments to make sure they get the resources needed to prepare, administration officials said.

New Jersey Gov. Chris Christie declared a state of emergency Saturday as hundreds of coastal residents started moving inland and the state was set to close its casinos. New York's governor was considering shutting down the subways to avoid flooding and half a dozen states warned residents to prepare for several days of lost power.

Sandy weakened briefly to a tropical storm Saturday but was soon back up to Category 1 strength, packing 75 mph winds. It was about 275 miles south-southeast of Cape Hatteras, N.C., and moving northeast at 14 mph as of 2 a.m. Sunday. Forecasters said the storm was spreading tropical storm conditions across the coastline of North Carolina, and they were expected to move up the mid-Atlantic coastline late Sunday. Experts said the storm was most likely to hit the southern New Jersey coastline by late Monday or early Tuesday.

Governors from North Carolina, where heavy rain was expected Sunday, to Connecticut declared states of emergency. Delaware ordered mandatory evacuations for coastal communities by 8 p.m. Sunday.

Christie, who was widely criticized for not interrupting a family vacation in Florida while a snowstorm pummeled the state in 2010, broke off campaigning for Republican presidential nominee Mitt Romney in North Carolina on Friday to return home.

"I can be as cynical as anyone," Christie said in a bit of understatement Saturday. "But when the storm comes, if it's as bad as they're predicting, you're going to wish you weren't as cynical as you otherwise might have been."

The storm forced the presidential campaign to juggle schedules. Romney scrapped plans to campaign Sunday in the swing state of Virginia and switched his schedule for the day to Ohio. First lady Michelle Obama canceled an appearance in New Hampshire for Tuesday, and Obama moved a planned Monday departure for Florida to Sunday night to beat the storm. He canceled appearances in Northern Virginia on Monday and Colorado on Tuesday.

In Ship Bottom, just north of Atlantic City, Alice and Giovanni Stockton-Rossini spent Saturday packing clothing in the backyard of their home, a few hundred yards from the ocean on Long Beach Island. Their neighborhood was under a voluntary evacuation order, but they didn't need to be forced.