(Image credit: Getty Images via @daylife)
U.S. stock and options markets will shut down Monday as Hurricane Sandy drenches Manhattan.
Originally, the NYSE hoped to shift trading to its electronic NYSE Arca exchange, which is not based near New York. The Nasdaq, already an electronic platform, had intended to stay open as well. The decisions came just before midnight on the East Coast, and officials say they will make a decision about Tuesday later today.
The shuttering of the two exchanges will halt U.S. stock trading and mark an unusual occurrence; significantly, the move to Arca would have meant the first time that the NYSE operated as an all-electronic exchange. It is the first time in 27 years, for example, that the NYSE will stay closed for weather. The NYSE opened the day after Tropical Storm Irene’s Sunday arrival last year: This time, the major difference is that Hurricane Sandy will hit on a Monday, and transportation will stay offline, a NYSE spokesman told FORBES.
The CBOE will cease trading too. And the CME Group also plans to close the trading floor of the Nymex commodities exchange, moving it to an electronic platform.
Most of Manhattan darkened by 9 p.m. Sunday, after New York Gov. Andrew Cuomo ordered the city’s subways, bus and rail lines closed. That will choke off access to the city for the 8.5 million commuters who normally use those systems to enter New York.
Hurricane Sandy is expected to make landfall sometime this evening, bringing heavy rains, gusting winds, flooding and power outages. It’s flooding that could impact Manhattan’s Financial District most. The neighborhood sits in a low-lying part of the island, and officials have cautioned that flooding could likely affect wide parts of the New York area.
Sandy, while not expected to be as devastating as Hurricane Katrina, will bare down on a swath of the country with 50 million people. Not as lethal, yet possibly the largest to smash into the U.S. Strong winds already stretch more than 500 miles from the storm’s eye. A potent combination of an Arctic jet stream wrapped around a tropical storm give Sandy its mighty strength. Forecasters see 12 inches of rain in some places, while three feet of snow is expected in the Appalachian Mountains.
Shortly before midnight, Sandy was roughly 400 miles from New York, travelling at 14 mph. Meteorologists predict the storm will land near southern New Jersey, then make a northwesterly turn.
Investors are excused for a bit of deja vu. Little more than a year ago, another hurricane prompted transit shutdowns, flooding worries and an evacuation of lower Manhattan. Wall Street then activated contingency plans, though flooding was not as bad as feared. Most trading firms keep alternative sites to ensure a smooth operation, while both the NYSE and Nasdaq keep their servers based in suburban New Jersey. Look for lower volume on the exchanges, though. Firms will not be running fully staffed.
The NYSE has not altered a day’s trading for weather in more than a decade. In 1996, a blizzard delayed the opening, and the exchange then closed at 2 p.m. Before that, Hurricane Gloria forced the Big Board closed in 1986. Since then, the NYSE has developed electronic trading to keep brokers’ orders flowing. The longest period of no trading: the four days following 9/11.