Sandbags in Manhattan - Reuters - 28082011
Sandbags placed along a Manhattan street Friday to protect against potential floods. Photo by Reuters
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Flights to and from the East Coast of the United States were halted last night in preparation for Hurricane Irene, as Americans went into emergency mode.

More than 1 million people were ordered to evacuate their homes along the eastern seaboard, including unprecedented evacuations in New York City.

Airlines canceled nearly 7,000 flights over the weekend, and all three New York area airports were ordered to close to incoming flights at noon yesterday. All the airlines with regular flights between Tel Aviv and New York - El Al, Delta and Continental - canceled their flights.

Tens of thousands of people are expected to be affected by the canceled flights between Israel and the United States. This is the last week of summer vacation, so flight traffic is particularly heavy.

The airlines are expected to sustain millions of dollars in damage.

The United States was the main destination for flights to and from Israel during the summer vacation this year.

The Israel Aviation Authority reported that 145,900 people flew to and from the United States in July, accounting for 10.7% of all international passenger traffic at Ben-Gurion International Airport that month. Nearly half of those passengers - 60,000 - flew to and from New York's JFK airport.

U.S. stocks eye perfect storm

U.S. stocks are setting up for another turbulent week that will begin with a focus, oddly enough, on the weather.

Traders juggling European debt worries and soft economic data are now staring at satellite images, tracking the path of Hurricane Irene, expected to hit New York over the weekend.

The unusually large storm traveled up the U.S. East Coast on Friday, threatening 55 million people, and was expected to cause billions of dollars in property damage.

Major U.S. exchanges are preparing to deal with power outages and flooding, and that could affect trading on Monday.

For now at least, the NYSE and Nasdaq expect to be open for trading as usual on Monday morning. The Big Board said a final decision will be made Saturday or Sunday, particularly on its trading floor in the low-lying financial district of Manhattan, which could see a storm surge and flooding.

One senior trader at a proprietary trading firm in New York said Friday that Hurricane Irene had destroyed any chance of a rally that had looked likely, given the extent of short positions that had been building in equity markets.

"If this hurricane is a disaster, my guess is we are going to be down 30-40 handles on Monday," he said.

Property insurers Allstate and Travelers hit two-year intraday lows on Friday, partly on worries over claims due to the hurricane.

"We intend to be open, but Mother Nature may have other plans," said Lou Pastina, executive vice president of NYSE operations.

After that, the focus may shift from the Federal Reserve's economic outlook to the August payrolls report next Friday.

August is shaping up as the worst month for stocks since February 2009, partly on the belief that the economy was headed for a double-dip recession.

For the month so far, the Dow Jones industrial average is down 7.1%, while the Standard & Poor's 500 Index is down 8.9%. The Nasdaq Composite Index is down 10%, still in correction mode. Those losses for August so far threaten to overshadow the bright spot at Friday's close, when all three indexes ended the day higher and scored their first weekly gains in more than a month.

The payrolls report on Friday is expected to show the U.S. economy created 80,000 jobs this month, according to economists polled by Reuters. In contrast, a total of 117,000 jobs were added to U.S. non-farm payrolls in July.

The U.S. unemployment rate is seen as steady at 9.1%.

Wall Street will have to deal with a torrent of data throughout the week, including personal income and consumption on Monday; S&P/Case-Shiller home prices on Tuesday; factory orders on Wednesday; and the Institute for Supply Management's factory activity index on Thursday.