Markets face challenge reopening after Sandy
Hurricane Sandy left behind dramatic images of flooded tunnels and floating cars in lower Manhattan, but the floor of the New York Stock Exchange is dry enough to open for business Wednesday, along with other financial markets. At least, that’s the plan.
The NYSE’s all-electronic exchange will carry the load if anything goes wrong on the physical trading floor. Wednesday is an important day to get markets going again, because it’s the last day of October. That means it’s the final chance for firms to make moves to get their monthly statements where they want them.
“A lot of large institutions will want to make sure that they’re properly positioned at the month end,” says TABB Group senior analyst Paul Rowady.
End of month trading is just one reason University of Virginia business professor Marc Lipson expects ample activity on Wall Street. “Combined with a flow of news related to the storm and all that pent up information that still is being digested on business, there’s gonna be a lot of people very interested in establishing positions,” Lipson says.
But light trading is the prediction of Baruch College professor Bernard Donefer, who’s the associate director of the school’s simulated trading floor. “We may see a very strange kind of low-volume day,” he says. Donefer says power and transit problems will keep some traders from being physically able to participate in the market. And he believes some investors will hang back, waiting out an uncertain market.
Whether trading can be frenzied or subdued depends on exchanges actually functioning. News stories have dramatically pointed out that this is the NYSE’s first two-consecutive-day closing related to weather since 1888. But markets also close and reopen without incident for two consecutive days on a regular basis: Saturday and Sunday.
“We close our markets every week for two days and reopen them without any difficulty at all,” says Larry Harris, professor at USC’s Marshall School of Business and former Securities and Exchange Commission chief economist. “We’ll reopen them after four days without much difficulty.”
Tomorrow may not be a normal trading day. But in one sense, it’s just back to business after a long, weird weekend.
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