To: Adwiz who wrote (24088 ) 11/19/1997 10:47:00 PM From: Glenn D. Rudolph Respond to
Nasdaq set to announce jump in trading capacity
Reuters Story - November 19, 1997 22:05
%TEL %ENT %US %STX MCIC V%REUTER P%RTR
WASHINGTON, Nov 19 (Reuters) - The Nasdaq Stock Market is
expected to announce Thursday a big jump in its capacity to
handle record trading volume under a new support system from
MCI Communications Corp., industry sources said Wednesday.
The announcement is timely as huge surges in volume in
recent weeks have raised concerns among regulators about Wall
Street's ability to cope with billion-share trading days.
Sources said the new MCI system will give Nasdaq the power
to handle many times over the number of shares traded during
record sessions, like those following the huge plunge in stock
prices on Oct. 27.
When the markets rebounded sharply Oct. 28, for example,
volume topped 1.3 billion shares on the National Association of
Securities Dealers' automated quotation system. The NASD is the
parent company of Nasdaq.
Nasdaq is "getting even greater capacity in the new
system," said a source who requested anonymity.
Officials at MCI and Nasdaq declined to comment.
NASD Chairman Frank Zarb and MCI Chairman Bert Roberts are
scheduled to hold a joint news conference Thursday. MCI has had
the contract to support Nasdaq's trading system, and the No. 2
long-distance carrier has again won the deal, sources said.
Analysts agreed that up to now the markets have performed
well in handling the surge in volume that has accompanied the
huge price swings on Wall Street in recent weeks.
But Securities and Exchange Commission Chairman Arthur
Levitt warned Wall Street executives on Nov. 7 that last
month's record-shattering trading was just the first harsh test
for the nation's stock markets.
"Let us not be complacent about what happened. I'm not
persuaded that (the record volume) was necessarily a true test
of the strength of our markets. The goal of this industry has
go to be capacity, capacity and capacity," he told a meeting of
the Securities Industry Association, a Wall Street trade group.
New York Stock Exchange Chairman Richard Grasso agreed that
the record volume was only a taste of what may come as markets
worldwide become more linked.
"When the wave comes it's not going to look anything like
last week. You can never be comfortable that you can be
prepared for an event," Grasso told reporters at the same
meeting.
