Financial Markets Will Be Open Monday After Dodging Worst of Irene’s Wrath
U.S. stock, bond and commodity markets will open as usual tomorrow after Manhattan was spared the worst of Hurricane Irene, avoiding the first shutdown due to weather since 1985.
NYSE Euronext (NYX), Nasdaq OMX Group, Bats Global Markets and Direct Edge Holdings LLC -- the largest operators of equity exchanges in the world’s biggest capital market -- sent statements saying they plan normal trading sessions tomorrow. The Securities Industry and Financial Markets Association recommended no change to bond-market schedules, and CME Group Inc. (CME) said the New York Mercantile Exchange will open.
“Exchanges had prepared for the worst, and thankfully the worst didn’t materialize,” Chris Isaacson, the chief operating officer at Bats, said in a phone interview. “The U.S. securities industry is very resilient,” he said. “Because of the electronification of markets, most systems are not dependent on humans being there.”
While the public face of U.S. equity trading is the New York Stock Exchange in Manhattan, about 13 percent of the nation’s volume took place on that venue in the past year. Almost all of the rest is handled electronically, with orders matched in data centers in New Jersey and elsewhere.
Irene struck New York City with winds of 65 miles (105 kilometers) an hour, the National Hurricane Center said in a special advisory at 9 a.m. local time. A storm surge of 3.8 feet was reported at New York Harbor and total water levels of almost 8.6 feet, or moderate-stage flooding, were reported at Battery Park City in lower Manhattan before receding, the hurricane center said.
“It wasn’t as bad as expected,” said Brian Pfeffer, chief operating officer at Direct Access Partners LLC, a New York- based brokerage with about 20 employees that work on the NYSE trading floor, in a phone interview today. “I don’t see a problem with trading tomorrow at all.”
Direct Access tested systems last night and was told by the management company that its office building where 60 more employees work, 40 Wall Street, would be open, Pfeffer said. He expects to drive to work tomorrow from Manalapan, New Jersey, or take a ferry if the Holland Tunnel isn’t operating normally.
“As for Monday, my plans are to leave around 3 a.m. to be sure to get in early and check with NYSE and our systems people,” Doreen Mogavero, chief executive officer of Mogavero Lee & Co., who trades on the NYSE floor, said in an e-mail today. “As long as systems are good and phone lines are up it should be business as usual.”
With trading poised to resume as normal, the focus of securities professionals turned to travel as New York City’s subways remained closed and flooding and debris affected train routes. The Metropolitan Transit Association, which operates lines serving the largest U.S. city, resumed limited bus service in the afternoon. It hadn’t disclosed as of 7:12 p.m. when subways will begin. Parts of the MTA’s Connecticut and New York rail lines may have “substantial damage,” the agency said.
New Jersey Transit will operate on a modified schedule tomorrow, it said in an e-mailed statement. Crews are assessing storm damage and will make necessary repairs, and commuters should not expect a normal day, it said.
“It’s safe to say it’s going to be a tough commute” tomorrow, the mayor said during a press conference today. He is the majority owner of Bloomberg News parent Bloomberg LP.
Hurricane Gloria, on Sept. 27, 1985, was the last time weather shut U.S. equities markets for an entire day. On Jan. 8, 1996, the New York Stock Exchange opened late and closed early after a snowstorm dumped 22 inches (55.9 centimeters) of snow on the city by dawn.
Stock trading stopped for four days after the Sept. 11, 2001, terrorist attacks on the World Trade Center in Manhattan. The most recent shutdown was on Jan. 2, 2007, to observe a national day of mourning for former President Gerald R. Ford, who died on Dec. 26, 2006.
“Post 9/11, we and other markets spent a great deal of time getting ready and building emergency disaster recovery-type functionality,” Eric Noll, an executive vice president for transaction services at New York-based Nasdaq OMX, said during an interview yesterday.
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