US markets to resume trading
Major US stock exchanges expect to reopen today after Sandy, the worst storm to hit New York in nearly 75 years, closed trading for two days.
NYSE Euronext said the New York Stock Exchange would open as usual, although it was prepared to switch to fully electronic trading if necessary. The Nasdaq Stock Market was also to resume operating, as were BATS and Direct Edge Exchanges.
"We have a green light," the chief operating officer of NYSE Euronext, Larry Leibowitz, said in an interview.
All of the US stock market operators took part in coordinated testing yesterday for trading on NYSE's backup system, should it need to be used. The exercise was also aimed at allowing member trading firms, many of which are operating on backup systems themselves due to complications from the storm, an opportunity to make sure they are ready for today.
Dozens were killed and millions have been left without power after Sandy slammed into the East Coast on Monday. The storm shut down most businesses in Manhattan and caused a rare flooding of the subway tunnels, which is expected to keep the system closed for several days.
US exchanges originally had planned to open markets on Monday, but they eventually responded to pressure from firms worried about employee safety, as well as the inability to see markets function effectively at light staffing. It was the first time in 27 years that exchanges closed because of bad weather.
Banks, brokers and others conferred for hours yesterday about the feasibility of resuming trade. The storm was expected to result in tens of millions of dollars a day in lost revenue for exchanges and banks, analysts said.
After two days of closure that occurred during the busy corporate earnings season and at the end of the fiscal year for certain funds, trading is likely to be volatile.
"At least in the early trade I expect an overreaction regardless of the direction. I expect to see a lot of volume at least in the first hour," said Art Hogan, managing director of Lazard Capital Markets in New York.
The NYSE, which accounts for about a quarter of US stock market trading volume, tested the possibility of routing trades through its electronic platform, Mr Leibowitz said. Under normal conditions it handles about half its volume through its trading floor at 11 Wall Street, where traders and specialists buy and sell stocks in person.
Many of NYSE's member trading firms including the top 25, which make up more than 90 per cent of volume on the exchange, took part in the tests, Mr Leibowitz said.
"Tomorrow will not be without hiccups, but will be good enough that the market will be fine," he said.
The NYSE had said on Sunday afternoon it planned to close its trading floor and to move all trading to its electronic market. It backtracked on that idea after traders and regulators expressed concern - given the difficulties and low staffing levels due to the storm - about moving everything to the all-electronic venue, a plan tested on March 31st but never used live.