Wall Street plans to open Monday, as Sandy bears down

  • World
  • Sunday, 28 Oct 2012

NEW YORK (Reuters) - U.S. stock exchanges and Wall Street banks sent crucial employees into Manhattan to stay in hotels and coworkers' homes, preparing to open for business on Monday with at least skeletal staff as Hurricane Sandy threatened to halt mass transit.

NYSE Euronext and Nasdaq OMX Group, the two major U.S. stock exchange operators, said on Sunday they still planned to open for trading on Monday. Direct Edge also said it expected to operate its EDGX and EDGA exchanges during normal market hours on Monday.

But NYSE said on Sunday afternoon that it would close its physical trading floor operations for the first time since 1985. It will instead trade NYSE-listed securities on its fully electronic exchange, NYSE Arca.

CME Group Inc said it was suspending floor trade on Monday at NYMEX World Headquarters, the biggest oil and energy futures and options market in the world. But electronic trade at all of CME will open at the regularly scheduled time at Globex and ClearPort, CME's online electronic platforms.

Major Wall Street banks including Goldman Sachs Group Inc, Citigroup Inc and JPMorgan Chase & Co were also preparing to open for business on Monday.

"The word going around the floor on Friday was people should expect this to happen. In the event the exchange does not open, they will trade electronically though," Ken Polcari, managing director for ICAP Equities, said on Sunday morning.

"If that happened, it's probably going to be very muted volume," he said.

One bond trader at a large Wall Street firm said the New York-based banks would route orders through their Midwest and West Coast offices. He said West Coast employees were planning to get up early, while colleagues in Europe were expecting a long day on Monday.

Volumes were, however, expected to be lower and orders may be harder to fill, the trader added.

The Securities Industry and Financial Markets Association said it has not made any recommendations to close the fixed-income market on Monday.

Hurricane Sandy is expected to slam into the East Coast on Monday night, bringing torrential rains, high winds, severe flooding and power outages. The rare "super storm", created by an Arctic jet stream wrapping itself around a tropical storm, could be the biggest to hit the U.S. mainland, forecasters said.

The scramble on Wall Street started early, as New York Governor Andrew Cuomo announced the subway, bus and rail system in the city would close at 7 p.m. EDT on Sunday (2300 GMT). About 8.5 million commuters use the Metropolitan Transit Authority, meaning most Wall Street employees would be unable to get to work as usual.

New York City Mayor Michael Bloomberg also closed public schools and ordered an evacuation of 375,000 people in coastal areas.

In August 2011, officials feared Hurricane Irene would flood lower Manhattan and cripple business in the world's financial capital, but the flooding was minor and there were no major disruptions at the exchanges.


Goldman, whose office in downtown Manhattan is in one of the areas to be evacuated, told employees that it would open for business, with some staff working from offices in Greenwich, Connecticut and in Princeton, New Jersey.

Others will work from home. It also plans to use teams in London and other locations around the world for additional support.

Citigroup, which has three locations in the New York evacuation zone, said there would be no access to those buildings, and "non-critical personnel should invoke their work-from-home strategies".

JPMorgan said it would be open, but the bank was focused on ensuring its employees' safety.

Wells Fargo & Co, which has about 1,170 locations in Sandy's path, had closed some of those by Sunday afternoon.


The NYSE has not suffered a weather-related late opening since 1996, having opened on time in extreme circumstances in the past, including Hurricane Irene last year. It last suspended physical trading floor operations on September 27, 1985 due to Hurricane Gloria, during which all markets were closed.

The Big Board is located in Zone C, an area considered low in terms of its likelihood of an evacuation, according to the New York Office of Emergency Management.

The NYSE has arranged accommodations for essential staff near its lower-Manhattan headquarters, while other employees have been encouraged to work from home or alternate locations, said a person familiar with the situation.

"Everybody on Wall Street has hotels booked for essential personnel," this person said, adding that the stock exchange would need several hundred people, compared to its usual 1,000, on the floor to keep trading going.

The major exchanges and most big trading firms have alternate trading facilities if downtown Manhattan is inaccessible, but the storm's wide path may affect a number of sites in the New York metropolitan area. Authorities have warned of possible widespread power outages that could last for days.

NYSE's servers are located in Mahwah, New Jersey, while Nasdaq has servers in Carteret, New Jersey.


Following the September 11 attacks in 2001, many hedge funds had drawn up contingency plans for emergency operations. Some funds, especially in Connecticut, were forced to put those plans into effect last year after Hurricane Irene left many suburban towns without power for days. They managed with backup generators to run computers and remote servers.

Large funds with multiple offices can continue to trade even if the main headquarters are uninhabitable due to flooding. But the impending storm has led Citi Prime Brokerage to postpone a Tuesday hedge fund event.

Some trading firms were also making alternate plans for employees. Wayne Kaufman, chief market analyst at John Thomas Financial, said his retail brokerage in lower Manhattan appeared to be taking a wait-and-see approach.

"I haven't seen anything on our email but I'm pretty sure the office is going to be closed or a skeletal crew at most," he said around midday on Sunday. "Nobody wants to take the chance of being stuck downtown."

(Reporting by John McCrank, David Gaffen, Caroline Humer, David Henry, Charles Mikolajczak, Richard Leong, Edward Krudy, Lauren LaCapra and Rick Rothacker; Editing by Paritosh Bansal, Jennifer Merritt, Tiffany Wu, Maureen Bavdek and Dale Hudson)

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