Fire Delays Start of Trading at Major Stock Exchanges
An electrical fire in a building that houses the main computer systems for both the New York and American stock exchanges caused an hour’s delay Friday in the opening of most stock and related options and futures trading around the country.
Efrain Parrilla, a New York City Fire Department spokesman, said the fire started just after 8 a.m. New York time in an electrical transformer three floors below street level in the 53-story office building in lower Manhattan. The building is just a few blocks from the NYSE’s headquarters. Three people, including a firefighter, suffered minor injuries.
The building houses the Securities Industry Automation Corp., which operates the computers that handle the automated aspects of trading for the NYSE, Amex and several regional exchanges. It also supplies electronic market data, including the ticker that lists minute-by-minute stock prices. SIAC is owned jointly by the New York and American exchanges.
The smoky fire wasn’t brought under control until 9:48 a.m. EST. NYSE trading normally opens at 9:30. Richard Torrenzano, the NYSE’s chief spokesman, said an hour’s delay in the opening of trading on the NYSE resulted when the exchange decided to power up its own emergency electrical generators to run the computer system, which took more than 30 minutes. He said the exchange decided to switch to emergency power because of the risk of a power interruption from Consolidated Edison, the New York electrical utility, in the aftermath of the fire. He said the computers themselves weren’t affected by the fire and no data was lost.
But the fire and an apparent lack of communication among the exchanges early Friday led the Amex and some regional exchanges to open trading briefly. They quickly shut down when they realized that the NYSE had delayed its opening and stock prices weren’t being transmitted by SIAC’s computers.
Amex stock trading went on for 4 1/2 minutes before it was halted. Bob Shabazian, an Amex spokesman, said exchange officials were aware of the fire but initially thought the computers that transmitted price information about Amex stocks were still operating. A spokesman for the Pacific Stock Exchange said its trading opened normally at 6:30 a.m. PST, but was shut down less than two minutes later when it became apparent that the NYSE wasn’t trading.
Trading of stock index futures--futures for baskets of stocks traded on the NYSE--went on for 20 minutes on the Chicago Mercantile Exchange. In a statement, the Merc said it had begun trading because it earlier had received two assurances from the NYSE on a special message system that trading in New York would begin on time.
Normal trading around the country resumed at 10:30 a.m. EST.
