Article: Trade Resumption Faces Big Obstacles
By Brendan Intindola and Elizabeth Lazarowitz
NEW YORK (Reuters) - U.S. stock markets on Thursday patched themselves together to reopen for business on Monday, after what will be a four-day hiatus following a deadly air attack that decimated the heart of the financial world and paralyzed trading.
Wall Street this week has grappled with stunned brokerage operations, crippled communications and obstructed access to lower Manhattan. The New York Stock Exchange, the world's largest stock market, is housed about three blocks south-east of the mountains of rubble that used to be the nucleus of the World Trade Center.
The markets' reopening after four days -- the longest shut-down since the start of World War I -- is contingent upon successful completion of a battery of tests to be undertaken by the New York Stock Exchange and the Nasdaq stock market on Saturday, exchange officials explained at a news conference in Manhattan on Thursday.
One of the key issues has been lack of access to lower Manhattan, which is blocked off below 14th Street. City officials have assured exchange leaders transport will be up and running to the area, NYSE Chairman Richard Grasso said at a New York press conference.
``Public transportation, both surface and subway, will be at a level to support the population necessary to bring the market up,'' Grasso said.
RESUMPTION AFTER DESTRUCTION
Tuesday's air attack destroyed the twin towers at the heart of New York's financial district, killed perhaps thousands of Wall Street employees, and left a large swath of the downtown area covered in dust and debris.
The NYSE, the world's largest stock market, was not damaged, but the gigantic piles of rubble, a general shutdown of lower Manhattan, and a breakdown in some phone and data lines has essentially sealed off the Big Board.
Stock trading will begin at 9:30 a.m. EDT (1330 GMT) on Monday, Grasso said, speaking at the news conference that included top U.S. stock exchange and government officials -- their second in two days -- at the offices of investment bank Credit Suisse First Boston.
``We have reached a conclusion based on our respective customers that the right thing to do for America, and certainly for those who are in the middle of this great tragedy that has been so heinously put upon us, is to resume trading,'' Grasso said.
The weekend will give the markets ample time for testing.
``There are some serious concerns about the infrastructure in place to support trading,'' U.S. Securities and Exchange Commissioner Laura Unger told reporters after the meeting with lawmakers. ``The reason that we are waiting for Monday is because we expect there won't be disruptions by Monday.''
The exchanges will test the market on Saturday and the market's open will be contingent on the results of those tests, said Nasdaq Chief Executive Hardwick Simmons at the press conference.
``We will make sure the system is fully tested, or we will not bring it back up,'' Simmons said.
Morgan Stanley and five other firms will be operating on contingency systems, said Morgan Stanley Chief Executive Philip Purcell.
``Everybody's done their job, they played their positions and they played them quickly,'' Purcell said, praising the stock exchanges, federal agencies including the SEC, rival firms and the city of New York. ``Morgan Stanley is open for business.''
ACCESS TO EXCHANGE
Exchange leaders are working with the city and state officials to get access to lower Manhattan -- a section now cordoned off as rescue workers comb the rubble for survivors -- and will provide a supplemental private bus service to get people to the area, Grasso said.
On a typical trading day, the NYSE houses about 3,200 people, Grasso said.
The trading floor of the American Stock Exchange, located about a block south of the World Trade Center, seems to have escaped undamaged, but is filled with debris and a back wall has caved in from the weight of the towers' collapse, Simmons said.
In the likely event that trade cannot resume at the AMEX on Monday, that market's options will be traded on the Philadelphia Stock Exchange, Grasso said, while the Amex exchange-traded funds and equities will be traded in the NYSE's ``expanded blue room'' one of the five interconnected trading rooms at the Big Board.
These Amex issues ``will trade as American Stock Exchange (securities), will trade in competition with the NYSE, but they will just be a bit closer,'' Grasso said.
PLUGGING IN
Telecom services to the area got hit hard in the attack but now are being restored.
Some 19 percent of the NYSE's communications service comes out of a Verizon Communications (NYSE:VZ - news) facility that is out of service, covered in chunks of steel and debris, and flooded. About 80 percent of the NYSE's service is handled out of Verizon's Broad Street facility, which now has commercial power and is fully operational.
Verizon will be working with the NYSE to test its communications system, and will reroute switches and capacity to ensure it has the necessary service to open.
``The NYSE is committed to opening on Monday and we're committed to make that happen. We're working around the clock to make it happen -- it's our first service priority,'' said Verizon spokesman Peter Thonis.
``The huge majority of our resources are fine. But we've got an unstable environment -- equipment underground that we can't get to yet. The good news that everyone -- from competitors to police to officials to suppliers -- are working together as one big team,'' Thonis said.
The top U.S. regulator of the communications industry on Thursday said the nation's telephone companies will likely have most of the capacity needed for the U.S. financial markets to function when they reopen.
``I think the companies who are going to have to service (the markets), feel confident they will have the majority of the capacity necessary,'' Federal Communications Commission Chairman Michael Powell told reporters. ``It depends on when and what the full load is.'' |
