Stock slump leaves online brokers struggling
By Reuters
April 5, 2001, 11:50 a.m. PT
Online brokers like Datek, Charles Schwab and Ameritrade struggle as U.S. stocks slide, and individual investors shun online stock trading.
Ameritrade said Monday that it would eliminate about 170 jobs, mostly at call centers, and declining markets have discouraged individuals from trading. Charles Schwab, which is the biggest discount and online broker in the United States, said last month it would cut up to 3,400 jobs as it, too, is seeing a slowdown in trading by its clients.
Datek on Thursday said daily average online trading volumes fell 37 percent in March from a year ago, as stocks continued to drop amid weak corporate earnings reports.
Datek customers funneled an average of 85,203 trades per day through the Edison, N.J.-based brokerage last month, compared with 135,699 in March 2000 and 91,541 this February.
For the first quarter of 2001, daily trading volume fell about 20 percent to 97,185 trades per day.
The Nasdaq Composite Index, home to some of the most well-known and widely held U.S. technology shares, fell 13 percent in March. The Nasdaq dropped nearly 26 percent in the first three months of 2001.
Assets are falling as stock market gauges drop. Datek's customer assets held by the end of March were $9.4 billion, down from $15.1 billion a year ago.
The number of funded accounts grew to 771,955 by the end of last month, compared with 740,652 at the end of February. |
