Blaze Slows Trading on Wall Street

A midday fire at a Manhattan power station blacked out much of New York’s financial district Monday, forcing a halt to trading at the American Stock Exchange and five futures exchanges, and shutting down some of the nation’s biggest investment firms.

The blackout, which began at 1:15 p.m. EDT, sent panicked traders scrambling to telephones to close out investment positions that made them vulnerable to losses in markets they could no longer follow. By shutting down so much of New York’s financial community, the blackout sharply curtailed trading from coast to coast in securities, oil, currencies and precious metals.

“This market’s hard enough to follow in broad daylight,” said Graham Laws, a floor broker in the oil futures market, which has churned wildly since the Iraqi invasion of Kuwait. “In total darkness, people are going to get hurt.”

The blackout cut off power to the twin-towered World Trade Center and other buildings around Wall Street that hold such giant investment firms as Merrill Lynch, Dean Witter Reynolds, Shearson Lehman Bros. and Prudential-Bache Securities.

As power blinked off, dozens of workers at the 107-story World Trade Center were trapped in 40 of the center’s 198 elevators. Hundreds were left in the towers until firemen could lead them down through staircases and the few elevators that functioned with backup power.

“We’ve got no lights, no computers, and it’s getting hot,” said one Dean Witter trader, as he waited to be evacuated. At some firms, telephone lines also died.

The New York Stock Exchange, which relies on a different power station, was unaffected.

But trading was called off for the day at the New York Mercantile Exchange, which trades oil and gas futures; the New York Commodity Exchange, which trades precious metals; the New York Futures Exchange, which trades stock-index futures; the New York Coffee, Sugar & Cocoa Exchange, and the New York Cotton Exchange. All were expected to reopen today, although officials said some openings might be delayed.

Subway service and even street lights were out in the affected area, which included most of Manhattan south of the Brooklyn Bridge. A pungent black smoke billowed through the area, and 13 New York City fireman were hospitalized before the blaze was brought under control in the late afternoon.

Power had been restored in most places by 6:30 p.m. The cause of the fire was not determined.

Laws, the oil futures broker, said members of larger trading firms called traders in the London petroleum market to close out their holdings in futures contracts. But smaller outfits, without trading privileges in London, might have to hold on to their investments and suffer losses if prices shifted overnight.

When the blackout hit the Shearson Lehman trading operation, several employees used the few computer screens still in operation to close the firm’s investment positions.

Robert Shabazian, a spokesman for the American Stock Exchange, said exchange officials would probably discuss after the incident whether the exchange needs to add backup power generation capacity. The New York Stock Exchange has such backup power, but the far smaller Amex has only enough backup power to allow its computer and communications equipment to wind down slowly without losing information.

The trading operations of California’s Security Pacific Bank and Bank of America are in Midtown Manhattan, and did not lose power.

Dow Jones & Co. is also headquartered in Lower Manhattan, and the blackout shut down the Dow Jones news service.