Tags: NYSE | trading | floor | close

NY Exchanges Close Trading Floors as Wall Street Prepares for Hurricane Sandy

Sunday, 28 October 2012 04:41 PM

The New York Stock Exchange and New York Mercantile Exchange canceled floor trading tomorrow as Hurricane Sandy barreled toward New York City with the threat of a 10-foot storm surge and 70 mile per hour winds.

The market operators said trading would occur normally on their electronic platforms. NYSE Euronext said it took the action after city and state officials declared emergencies and suspended public transportation starting tonight.

Workers stacked sandbags in Lower Manhattan while banks and brokerages tested contingency plans and prepared to operate with skeleton crews. Governor Andrew Cuomo’s order that subway, bus and commuter rail services be closed as of 7 p.m. left many of the city’s securities industry employees wondering how they would make it to work.

“We have enough people who live in Manhattan proper to have some staff and some people are staying in hotels,” said Dan McMahon, director of equity trading at Raymond James Financial Inc. in New York. “It doesn’t make any sense given Governor Cuomo’s announcement that we encourage people to come in to the city.”

Barricading Goldman

Around Lower Manhattan today, cranes laid concrete barricades at Goldman Sachs Group Inc.’s headquarters at 200 West Street. Sandbags were piled along garages and doors at Four World Financial Center, the offices of Bank of America Corp., and lined the sidewalk facing the river outside the Depository Trust & Clearing Corp. and Nymex.

At the NYSE, workers began stacking sandbags this afternoon. The Big Board said in a statement it will invoke contingency plans to trade its stocks on NYSE Arca, an all- electronic platform. NYSE Amex Options will open electronically. The exchange operator didn’t say when the physical trading floor at 11 Wall St. would re-open. NYSE MKT, formerly known as NYSE Amex, will be suspended, the company said.

At NativeOne Institutional Trading at 30 Broad Street, James Maguire, who helps run the trading desk, said he told workers to stay home.

“Most indications to us are that our customers are not going to be active over the next couple days,” he said. “They’re boarding up their houses.”

Flood Watches

Sandy’s punch may be felt from Virginia to Massachusetts, said Rick Knabb, the National Hurricane Center’s director. High wind warnings and watches, calling for gusts as strong as 70 miles (113 kilometers) per hour, stretch from Maine to North Carolina and as far west as Ohio, according to the National Weather Service. Flood watches and warnings cover most of the Northeast and mid-Atlantic coast.

The threat of that water coming onto shore prompted New York Mayor Michael Bloomberg to call for the evacuation of low- lying neighborhoods including Battery Park City and areas near the East River in southern Manhattan. The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.

The evacuation order resulted in the closure of the Nymex floor, CME Group Inc., its owner, said in an e-mailed statement. Electronic trading of energy and other Nymex products will be unaffected.

Nasdaq OMX Group Inc. executives are monitoring the situation, coordinating with other exchanges and working with government officials, spokesman Joe Christinat said in a phone interview today.

Monitoring Storm

The Securities Industry and Financial Markets Association is monitoring the storm and will make an announcement if there are any changes to its market recommendation, the group said today in a statement e-mailed by spokeswoman Liz Pierce. The trade group representing securities firms, banks and fund managers, provides nonbinding recommendations on scheduling for most U.S. fixed-income markets.

The last time the NYSE cut trading hours for weather was Jan. 8, 1996, when a blizzard dropped more than 20 inches on New York City.

NYSE received powers in December 2009 allowing it to let Arca operate on its behalf when emergency conditions prevent the exchange from operating normally. NYSE’s Rule 49, which had never before been invoked, says the declaration must be necessary for the securities markets to continue to operate.

‘Without Humans’

“The question is how will NYSE function without humans?” Ben Willis, a managing director at Albert Fried & Co., a boutique broker in New York, said in a phone interview. “It would be a very painful event,” he said. “We’d see what will happen if the floor isn’t there to trade.”

The DTCC, which provides clearing and settlement services for stocks and bonds, is prepared for the storm, according to spokeswoman Judy Inosanto. Its headquarters are in downtown Manhattan.

“From a technology standpoint we’re ready to operate from multiple alternative centers,” Inosanto said in a phone interview. “A lot of our people will be working remotely here in New York. We have people on staff in maintenance and security in the building. We have staff on hand and procedures to protect against a flood. We are taking all security measures. We anticipate meeting all regular deadlines.”

Sandy, which killed as many as 65 people in the Caribbean on its path north, may be capable of inflicting as much as $18 billion in damage when it barrels into New Jersey tomorrow and knocks out power to millions for a week or more, according to forecasters and risk experts.

Emergency Plans

Financial firms made plans to close some offices, conduct business from other cities, reserve hotel rooms and let employees work from home.

American Express Co., the credit-card lender whose headquarters is in lower Manhattan, will shut all its offices in the tri-state region Monday, according to an e-mail today from Sarah Meron, a spokeswoman. The firm hasn’t disclosed plans for the following day, she said.

Goldman Sachs, the investment bank based in lower Manhattan, expects to be open for business with help from overseas offices and people working remotely.

Plans include using “teams in London and other locations around the world for additional support, having designated people work from our Greenwich and Princeton sites and, for most of you, working from home,” Goldman Sachs Chief Administrative Officer Jeffrey Schroeder said in a staff memo that obtained today by Bloomberg News. Some individuals deemed critical to operations will be told to come to work if they can get to their offices and return safely, according to the memo.

Citigroup Inc., the third-biggest U.S. bank by assets, has offices in the potential flood zone that will be shut, according to an internal memo obtained by Bloomberg. Employees won’t have access to buildings at 111 Wall St. and 388/390 Greenwich St., according to the memo.

© Copyright 2018 Bloomberg News. All rights reserved.

1Like our page
The New York Stock Exchange and New York Mercantile Exchange canceled floor trading tomorrow as Hurricane Sandy barreled toward New York City with the threat of a 10-foot storm surge and 70 mile per hour winds.
Sunday, 28 October 2012 04:41 PM
Newsmax Media, Inc.

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved