NYSE Considers Extending Its Trading Hours

The New York Stock Exchange might extend trading hours to between 5 a.m. and midnight Eastern time next year as it battles for a bigger piece of the more than $80 billion in shares that trade around the world each day. Big Board hours are currently 9:30 a.m. to 4 p.m.

By opening earlier and closing later, the Big Board would compete for customers and listings with markets from Tokyo to London. It would also vie for the growing demand from U.S. investors who want to trade after the NYSE closes.

“The growth in global investing will not allow markets to be competitive if they constrain themselves to a time clock--in our case, Eastern Standard Time,” NYSE Chairman and Chief Executive Richard Grasso said, speaking at an information technology conference in New York.

Grasso said the exchange plans three trading shifts starting in June 2000: European share trading early in the morning, the regular session for U.S. and non-U.S. shares, and evening trading “to embrace a consumer group that traditionally has been shut out.”

While Grasso declined to elaborate, that suggests the NYSE is targeting individual investors who currently can’t trade after-hours, said William Freund, a former NYSE chief economist. Much of the trading in NYSE-listed companies after the market closes is handled by Reuters Group’s Instinet system, which is generally available only to institutional investors.

Convincing the biggest foreign companies to list their stocks on the NYSE has been one of Grasso’s top priorities because U.S. investors increasingly look for opportunities abroad. He wants to increase trading hours to keep investors from going to other exchanges.

The number of foreign listings has risen about fourfold since 1990, to 375, or about 12% of the Big Board’s total. Trading in these shares represents about 15% of NYSE volume, Grasso said.

“If New York wants to be a global market, it has to trade European shares when Europe’s trading them and Asian shares when Asia is trading them,” Freund said.

Talk of changing the schedule comes as European exchanges combine forces. The Frankfurt and London stock markets began letting customers trade over each other’s electronic systems last month.