* Stock, options markets shutting down Monday
* Plan for Tuesday still up in the air
* Banks prepare for storm, put key employees in hotels
* Closure because of fears of market integrity-sources
* Bond markets still open, closing at noon
By John McCrank and Caroline Humer
NEW YORK, Oct 28 U.S. stock and options markets
will be closed on Monday, and possibly Tuesday, as regulators,
exchanges and brokers worry about the integrity of markets and
the safety of employees in the face of Hurricane Sandy.
Market participants and regulators decided late on Sunday to
shut the market, reversing a plan to keep electronic trading
going on Monday. Bond markets will remain open, but will close
at noon, a trade group said.
The decision to close stock and options markets came after
regulators, exchanges, and dealers discussed the unknowns that
would have been tested if the markets opened on Monday, three
sources familiar with the situation said.
For example, NYSE Euronext's New York Stock Exchange
had initially planned to shut its physical trading floor, which
would have meant operating as an all-electronic exchange for the
The decision to shut down the stock markets came after Wall
Street had prepared to open for business on Monday with limited
staffing after a mass transit shut-down in New York, booking
hotel rooms for key employees and leaning on offices in other
Wall Street banks, including Goldman Sachs Group Inc
and Citigroup Inc, activated their emergency plans, which
many firms put in place after the Sept. 11, 2001, attacks. It
was not immediately clear if those plans had also changed.
Some bank offices in lower Manhattan's Financial District
are in evacuation zones and most non-critical staff and
employees who don't rely on high-speed systems, including some
investment bankers, were asked to work from home.
(For a list of how Wall Street firms and exchanges are
dealing with Hurricane Sandy, please click )
The storm is expected to slam into the U.S. East Coast on
Monday night, bringing torrential rain, high wind, severe
flooding and power outages. The rare "super storm" - created by
an Arctic jet stream wrapping itself around a tropical storm -
could be the biggest to hit the U.S. mainland, forecasters said.
The scramble started early as the threat of the storm forced
the New York mass transit system to shut down on Sunday evening,
leaving tens of thousands of employees stuck at home.
About 8.5 million commuters use the Metropolitan Transit
Authority's transit lines daily, meaning most Wall Street
employees would be unable to get to work. New York City Mayor
Michael Bloomberg also closed public schools and ordered an
evacuation of 375,000 people in coastal areas, including
downtown offices of banks such as Citigroup.
The major exchanges and most big trading firms have
alternate trading facilities if downtown Manhattan is
inaccessible, but the storm's wide path may affect a number of
sites in the New York metropolitan area. Authorities have warned
of possible widespread power outages that could last for days.
Wall Street was spared the worst of Hurricane Irene in
August last year. Officials had feared Hurricane Irene would
flood lower Manhattan and cripple business in the world's
financial capital, but the flooding was minor and there were no
major disruptions at the exchanges.
All of the U.S. exchanges, as well as major broker-dealers,
and regulators were involved in the decision to close the
markets, according to several executives at exchanges and
The U.S. markets have seen three high-profile snafus this
year, beginning with the failed IPO of BATS Global Markets, the
No. 3 U.S. equities exchange, on its own exchange; Facebook
Inc's botched markets debut on Nasdaq's exchange; and a
software glitch that cost trading firm Knight Capital
well over $400 million, nearly forcing it into bankruptcy.
The Securities Industry and Financial Markets Association
said earlier on Sunday it is recommending an early close of noon
EDT on Monday for the trading of U.S. dollar-denominated,
fixed-income securities. It said its member firms should decide
for themselves whether their fixed-income departments remain
open for trading.
The foreign exchange market's activity generally follows the
fixed income markets.
The New York Federal Reserve has calls scheduled for early
Monday morning with dealers to see what each dealer is doing to
cope with the storm, and will modify its market activities
In Washington, the Commerce Department said it would post
its report on personal income and spending for September on its
website at 8:30 a.m. as scheduled, even though the federal
government was closed.
The Federal Reserve said it would postpone its regularly
scheduled releases, including its weekly report on selected
interest rates and daily commercial paper data. The Fed said it
would release the data when federal offices in the Washington
CME Group Inc said it will be closing its U.S.
equity index futures and equity index options on futures markets
on the trading floor and on CME Globex at 8:15 a.m., Central
Time, on Monday. All other CME Group futures and options on
futures markets will remain open.
IntercontinentalExchange Inc said trading in the ICE
Futures Russell equity index futures and options will close
early, at 9:15 a.m. Eastern Time on Monday. It said ICE Clear
Credit will close at noon Eastern Time on Monday, with the U.S.
fixed income markets. It said all other ICE markets and clearing
houses will remain open and follow regular market hours.
WORK FROM HOME
Goldman, whose office in lower Manhattan is in one of the
areas to be evacuated, told employees earlier on Sunday that it
would open for business, with some staff working from offices in
Greenwich, Connecticut, and in Princeton, New Jersey. It also
plans to use teams in London and other locations around the
world for support.
Citigroup, which has three buildings in the evacuation zone,
said "non-critical personnel should invoke their work-from-home
JPMorgan Chase & Co said its buildings were still
open Monday and the bank was planning to be fully operational,
using resources in the United States, Europe and Asia.
For many investment bankers and private equity executives,
working from home will make the most sense. Blackstone Group
planned to close its office on Monday.
Hurricane Sandy also led to some events being canceled or
postponed. Citigroup Prime Brokerage postponed a hedge fund
event that had been scheduled for Tuesday.