Stock Markets Reopen After Hurricane Sandy Caused NYSE to Close
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UPDATED: Oct 31, 2012
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The New York Stock Exchange and other trading companies shut down Monday due to extreme weather conditions for the first time since 1888. Reopening Wednesday brings uncertainty on Halloween as investors brace themselves for what damage may have been caused by the two-day interruption. While the East Coast mourns the tragic loss of lives and begins to bounce back from the destruction Sandy has left behind, reports say Wall Street workers are anxious but optimistic to get back to work.
The New York Stock Exchange (NYSE) is the world’s largest stock exchange. Located on Wall Street, its trading floor is the premiere site of buying and selling public trade shares of stock. In an auction-style approach, traders gather daily to make investments for clients and lay the foundation for the entire securities industry. Nasdaq, (National Association of Securities Dealers Automated Quotations), the second-largest stock exchange company, closed Monday along with the NYSE, and will also reopen Wednesday.
Stock Market Regulation
The stock market is one of the most highly regulated industries in the United States. Congress is ultimately in charge of securities, having created most of the framework and laws that affect how the industry operates. Congress oversees the Securities and Exchange Commission (SEC) and other regulatory agencies involved with stock markets. The SEC is directly responsible for enforcing trade regulation; it is in charge of stock exchanges and public company filings.
Reports say the SEC, trading companies, industry groups and New York City officials have all been working non-stop to ensure operations are back up Wednesday and that technical kinks are worked out. Big name federal regulators including Timothy Geithner also weighed in on how to avoid trading catastrophes upon resuming Wall Street, according to reports.
Traders Will Be Busy
While electronic trading continued throughout the storm, it did not facilitate the same level of operations the NYSE is used to. ABC News estimates that billions of dollars in losses for consumers and businesses will result from the disaster.
Stock and bond markets depend on corporate profit reports, and economic settings both in United States and abroad. Investors are returning to business as several companies, including Anheuser Busch Inbev, First Solar, General Motors, Allstate, Hyatt Hotels, MasterCard and Clorox, are expected to report quarterly earnings, according to a USA Today news report. It may have also been bad timing with tax and financial law issues weighing in Congress and in the upcoming election—only one week away.
In addition, China and other Asian markets, which are closely intertwined with the NYSE, are set to provide investors with fresh data. Stock watchers predict a surge in trading to make up for lost time. Like the rest of New York, traders will have their work cut out for them in the days to come to catch up and rebuild.
Concerns and Reassurances
Some are expressing concerns that a hasty restart in trading could result in unforeseeable problems. If exchanges resume before they are ready, markets could face further setbacks that could create more problems for the US financial system.
While weather damage to the firm buildings themselves is reportedly not going to cause further delay on Wall Street, concerns over continued transportation and power outages are still widespread. The exchange is currently running on backup generators and it remains to be seen how the hurricane damage will affect business Wednesday and for days to come.
However, as reports come in, it seems the market is off to a positive start and traders are optimistic.