The decision was announced in statements by NYSE Euronext, Nasdaq OMX Group Inc. and Bats Global Markets Inc. The NYSE’s headquarters are running on backup power and will keep using it if necessary all week, Larry Leibowitz, the chief operating officer, said in a phone interview. Fixed-income trading, halted at noon Oct. 29, will also reopen, under a recommendation by the Securities Industry and Financial Markets Association. Trading was canceled for four straight days in the wake of the Sept. 11, 2001, terror attacks and the New York exchange shut for seven days in 1933 during President Franklin Delano Roosevelt’s bank holiday.
U.S. exchanges are in the second day of a suspension called to safeguard workers as Sandy barreled north, halting public transit and forcing evacuations in New York City. NYSE Euronext’s building on Wall Street is near areas of Manhattan that were deluged when the storm propelled a 13-foot sea surge. Arthur Levitt, the former chairman of the Securities and Exchange Commission, said the NYSE needed a better backup plan.
“We’ve got people there at the floor, which was not compromised by the flooding,” Duncan Niederauer, chief executive officer of NYSE Euronext, said in an interview on Bloomberg Television with Matt Miller. “We’re spending the day testing connectivity with clients, many of whom are operating from their own contingency sites. So first and foremost, we’re going to deal with them.”
The SEC has been in consultation with the markets throughout the storm and supports the decision to reopen, John Nester, a spokesman, said in an e-mail. The Depository Trust & Clearing Corp., located at the southern tip of Manhattan, was open yesterday and expects to be fully operational today, according to a statement.
Streets outside the exchange at 11 Wall Street were strewn with leaves and branches before noon New York time, with sandbags still stacked two high around the building. Mailboxes and trashcans were overturned at Broad Street and Beaver Street.
Florescent lights were visible on upper floors of the NYSE building. Water had receded from the financial district. Tourists wearing sneakers took pictures amid groups of police and residents walked their dogs around the neoclassic structure, opened in 1903.
“We fully plan to be up and running,” Leibowitz said. “There’s no damage to the physical plant. We’re running off our generators.”
Brokers and trading firms may experience “spotty connectivity problems” when they access markets today, Leibowitz said. He predicted some firms may have trouble finding fuel if they are running from backup systems or using generators.
NYSE plans to operate the floor with at least 100 people including designated market makers and other personnel, Leibowitz said. All NYSE-listed companies will be represented by their market makers, though the firms may not be “fully staffed,” he said.
The company’s main data center for its U.S. markets in Mahwah, New Jersey, “cut over to backup power as a precaution,” Oct. 29, Leibowitz said. He expects all NYSE Euronext exchanges run out of the Mahwah facility to operate normally today. “It’s better to cut over to backup power when you can control it,” he said.
The NYSE began testing for a backup plan that would be necessary had storm damage prevented it from reopening the floor. In that case, NYSE Arca, its electronic market, would be deemed the primary market for NYSE-listed stocks and the Big Board wouldn’t have operated. Firms started to test their systems at 9:30 a.m.
American equity markets were closed Oct. 29 and yesterday, the first consecutive shutdowns because of weather in more than a century. The last comparable closure of the NYSE was on March 12 and 13, 1888, when a blizzard dumped 21 inches of snow on New York, according to the company’s website. The exchange was closed for about 1 1/2 days after a snowstorm in February 1978.
The NYSE’s reputation will suffer because of the shutdown, said former SEC Chairman Levitt.
“People look to the New York Stock Exchange as being the symbol of American capitalism, and to see the exchange go down for two days without an adequate backup plan is very, very unfortunate,” Levitt said on a Bloomberg Radio interview. “To see the New York Stock Exchange crippled is a body blow that will really shake the image of that institution for a long time to come.”