Markets Get Ready to Reopen
The New York Stock Exchange and the Nasdaq Stock Market said Saturday that daylong tests of their electronic systems were successful and that they plan to reopen Monday--ending the longest interruption of trading since before World War II.
But the scene in lower Manhattan still appeared chaotic in the wake of the destruction of the World Trade Center, and many people walking the streets wondered how the markets could be up and running by Monday.
Meanwhile, across the nation many institutions, companies and individuals were encouraging their peers to be ready to buy stocks Monday to prevent a sharp sell-off.
The reopening of the NYSE’s famed Wall Street trading floor is expected to provide a psychological boost for the city and beyond.
In addition to getting a critical piece of the country’s financial system back on its feet, restarting the markets will be an important symbol of the nation’s recovery from last week’s terrorist attacks, market and government officials said.
Treasury Secretary Paul O’Neill and other officials will be at the NYSE for the start of trading. A group of New York police officers, firefighters and other emergency workers will ring the traditional opening bell at 9:30 a.m. EDT.
The resumption of stock trading will “send a very important message to the criminals who so heinously attacked this country--that they lost,” NYSE Chairman Richard Grasso said at a news conference at the exchange. “The American way of life goes on.”
The NYSE, located a few blocks from the collapsed World Trade Center towers, wasn’t physically affected by the disaster.
But communications links between the NYSE and its member brokerage firms sustained heavy damage. Phone companies Verizon Communications and AT&T; have been working around the clock to replace lines.
The NYSE and Nasdaq said their tests Saturday showed that communications were restored enough to allow trading to resume. The markets are expected to do final testing today.
Nasdaq, which isn’t a physical exchange like the NYSE but a nationwide network of brokers linked electronically, said brokerages that represent 98% of a normal day’s trading volume participated successfully in Saturday’s tests. Nasdaq is “ready to go on Monday,” Chief Executive Hardwick Simmons said.
The smaller American Stock Exchange, located close to the World Trade Center site and still lacking power, won’t be able to open its trading floor Monday but will resume operations with the help of rivals. For example, its stocks will trade on the NYSE.
Nevertheless, questions remain about how the first day of trading will go--particularly on the logistics of getting tens of thousands of people to work in lower Manhattan, and on the direction of the market.
Though much of the subway service in the Wall Street area is expected to be restored by Monday, many people filing back for their first day of work could experience delays and disruptions. The NYSE and Nasdaq urged workers to arrive much earlier than usual.
When asked whether it might be a stretch to have the exchange working by Monday, Grasso dismissed the suggestion. He said the NYSE had rented 50 buses to take people to the exchange, but he now believes public transportation will be sufficient and the buses won’t be needed.
On rubble- and dirt-filled streets in the Wall Street area, many New Yorkers were skeptical that business could resume so soon.
“It is difficult to imagine that they will be able to open up lower Manhattan on Monday, given the destruction. There’s still smoke in the air,” said Ira Glauber, an attorney from uptown Manhattan who came down to Wall Street on Saturday to view the damage.
The NYSE said it would have a large supply of surgical masks available for those needing them.
The four-day trading suspension has been the longest since at least 1933, when markets were closed in tandem with federally ordered bank closures during the Depression.
Monday will be the first opportunity for most U.S. investors to react to last week’s attacks, which occurred Tuesday morning. Markets never opened that day.
However, most foreign stock markets traded last week. After diving Tuesday, most recovered Wednesday and Thursday, then tumbled again Friday.
Grasso expressed hope that the delay in reopening U.S. markets has given investors a chance to “step back” and assess whether selling would be the right move.
Despite wars and other catastrophes, the stock market always has recovered over time, he said. “Those who have stayed the course [in stocks] have been enormously benefited,” he said.
Fears about investors’ reaction have been compounded by the weakened state of the market in recent months. Stock prices fell sharply in August and early this month, as worries mounted about the struggling economy.
The Dow Jones industrial average had tumbled nearly 9% between Aug. 1 and Monday, closing that day at 9,605.51.
The now 18-month-long decline in key market indexes is the longest since 1973-74.
Over the last few days, many institutions, firms and individuals have been exhorting the nation to buy stocks Monday to prevent a severe decline in share prices.
Companies such as technology giant Cisco Systems, insurer American International Group and coal miner Arch Coal have announced plans to buy back some of their shares in the market. Such purchases could help support the stocks’ prices.
Many of the companies have specifically cited a desire to demonstrate their “great confidence in U.S. financial markets,” as Arch Coal chief Steven F. Leer put it.
In e-mails and in open letters on financial Web sites, others also appealed to Americans’ patriotism in urging people to buy stock Monday, or at least refrain from selling.
“If every one of us, along with millions of other Americans, get in there and buy 100 shares of your favorite stock, we can reach the goal of getting a billion shares on the plus side at the ringing of the closing bell on Monday,” Dave Sackett, a partner at Republican polling firm Tarrance Group, wrote in an e-mail to associates.
“If we are going to rebuild, provide for the families of the victims and fund the effort, we have to keep a strong economy to do it. Here is a way you can do something tangible to help the effort,” he wrote, encouraging recipients to “pass this along to your friends and colleagues.”
However it goes, many people on Wall Street say they are eager to return to work.
“We’ve all been very anxious to get back,” said Warren Meyers, managing partner at an NYSE floor brokerage. “We want to show to the world that this is an extremely strong system.”
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