NEW YORK (Reuters) - The massive American flag draped over the New York Stock Exchange’s towering pillars has been removed so that Hurricane Irene doesn’t tear it down this weekend.
Inside the downtown Manhattan building, Big Board staff on Friday were prepping a backup power generator located well above the Wall Street-level trading floor. Extra fuel is in the basement and extra food is in the kitchen.
Benedict Willis III, director of floor operations for investment banking boutique Sunrise Securities, said the NYSE has a responsibility to open on Monday after the storm passes because millions of investors are relying on it for stock prices.
“But if the waters rise this high,” he said gesturing at the buzzing trading floor, “then it’s a bigger problem than I can handle. My name’s not Noah.”
With the powerful storm roaring up the U.S. East Coast, setting off evacuations in the Carolinas, NYSE Euronext NYX.N officials said that for now at least they plan to open trading as usual next week.
But a final decision, particularly on floor operations, will not be made until Saturday or Sunday. It hinges on whether city subways are running and whether New York Harbor waters flood over the low-lying downtown core — one of the worst-case scenarios if Irene hits on Sunday as expected.
“We intend to be open, but Mother Nature may have other plans,” said Lou Pastina, executive vice president of NYSE operations.
“But if you get a huge tidal surge then that’s different. The building wouldn’t be occupiable,” Pastina said, adding he and other staffers will inspect the building when it is safe to do so this weekend.
The NYSE and the broader U.S. marketplace are mostly automated, quietly running out of powerful data centers in New Jersey and elsewhere across the country. Barring large-scale power outages, electronic trading is expected to function normally next week.
The all-electronic Nasdaq Stock Market, whose billboards light up Times Square, plans to open as usual Monday. The New York Mercantile Exchange (NYMEX), a few blocks from the NYSE, has “contingency plans in place to ensure the proper functioning of our markets,” said parent CME Group Inc (CME.O).
Any decision to halt U.S. equity trading would involve the U.S. Securities and Exchange Commission and major market operators.
The last hurricane to shutter the NYSE was Gloria in 1985.
On the trading floor Friday, no one was scrambling to move computers, screens and other equipment to higher levels and possibly out of harm’s way. “This place is a vault, it was built to survive bombings in the past,” said Jonathan Corpina, senior managing partner at Meridian Equity Partners.
Willis, dressed in a shirt and tie of stars and stripes, like others said he was prepared to drive into the congested downtown on Monday for the open of markets.
The iconic trading floor now handles a fraction of the buy and sell orders that it did even five years ago, when about 3,000 brokers, specialists and others worked there.
There are now about 1,000 on the floor, and Pastina estimated the Big Board would need half of them in order to safely open Monday. Floor specialists are still important, particularly at the open and close of markets, when orders pile up.
Trading could open electronically on Monday, “but it isn’t as efficient as the pricing we have here,” Corpina said.
Kenneth Polcari, managing director of ICAP Equities, said closing the floor “would be disruptive for sure.”
“If you’re going to open Monday, everyone should open,” he said of the dozens of U.S. stock exchanges and alternative venues that now each handle a portion of trading. “Otherwise it’s not fair.”
While Pastina said the NYSE was preparing for a “direct hit” and taking all possible safety precautions, some Wall Street firms held last-minute meetings to plan for possible market disruptions stemming from Irene.
Some traders left early to be with family and to prepare their homes, while others stayed glued to their desk computers and televisions to track the hurricane.
Traders are “watching that big white swirl” on their TV sets, says Guy LeBas, chief fixed income strategist at Janney Montgomery Scott in Philadelphia.
Reporting by Jonathan Spicer, additional reporting by Richard Leong; Editing by Tim Dobbyn and John Wallace