Stock Trading Closed on All Markets
October 29, 2012
The U.S. securities industry canceled equity trading on all markets today, moving to protect workers as Hurricane Sandy barreled toward New York City with 70-mile-per-hour winds and the threat of an 11-foot sea surge.
The shutdown, announced by the Securities and Exchange Commission, may extend through tomorrow and followed an earlier decision by the New York Stock Exchange to close floor trading. Risks posed by the storm, expected to come ashore late today in southern New Jersey and potentially affect 60 million people, were deemed too great to require workers to travel.
“It was a judgment decision based on the safety of a lot of market participants, especially as the storm seems to be getting more severe,” said Larry Leibowitz, chief operating officer of NYSE Euronext, in a phone interview. “Given all the emphasis on stability and investor confidence, operating the market that way didn’t seem to serve the public interest. Why do this? To prove we can? That didn’t seem to make a lot of sense.”
Trading in U.S. equity-index futures will continue until 9:15 a.m. New York time today, CME Group Inc. said in a statement. The Securities Industry and Financial Markets Association recommended trading in dollar-denominated fixed- income securities end at noon. Futures on the Standard & Poor’s 500 Index dropped 0.6 percent at 6:49 a.m. in New York.
Exchanges from the NYSE and Nasdaq Stock Market to those run by Direct Edge Holdings LLC in Jersey City, New Jersey, and Bats Global Markets Inc. in Lenexa, Kansas, will suspend operations. U.S. equity trading is spread across 13 exchanges and dozens of private venues run by brokerages.
NYSE Euronext and Nasdaq OMX Group Inc. said the suspension would last through tomorrow, “pending confirmation,” according to e-mailed statements. The SEC will stay in communication with the markets as the situation warrants, said John Nester, a spokesman for the SEC in Washington.
Options trading will also be closed, according to Gail Osten, a spokeswoman for CBOE Holdings Inc., which operates the largest equity derivatives market, and Joseph Christinat, a spokesman at Nasdaq OMX.
“It’s an inconvenience, but clearly the safety of the employees and participants in the market is a primary concern,” James Angel, a professor at Georgetown University’s McDonough School of Business in Washington, said in a phone interview. “Even if the exchanges can operate totally remotely, people connecting to the exchanges may be battling floods. We ran into the same issue after 9/11 even though Nasdaq and other trading venues could operate. ”