By Amy Baldwin
Associated Press
NEW YORK – U.S. stock trading, halted for four days after the terrorist attack on the World Trade Center, will reopen as planned on Monday, the nation’s stock markets said Saturday after successfully testing their computer and communications systems.
“Based on today’s evaluation of our systems … at 9:30 Monday morning trading will resume,” New York Stock Exchange chairman Richard Grasso said.
The markets were closed after jetliners hijacked by terrorists destroyed the World Trade Center on Tuesday morning and forced the shutdown of the city’s financial district. It was the longest closing of the NYSE since the aftermath of the 1929 stock market crash.
Telephone and utility workers continued reconnecting services Saturday, but “our systems are all go,” Grasso told a news conference.
The computerized Nasdaq Stock Market, which doesn’t have a trading floor as the NYSE does on Wall Street, said it had also conducted a successful test of its systems, verifying that its member firms will be able to trade.
“Everything is positive. Everything worked,” said Gregor Bailar, executive vice president of operations for Nasdaq.
The NYSE, located about five blocks from the trade center, was not physically damaged in the attack.
But a local telephone switching operation was knocked out during the attack, severing some of the communications systems used in trading. A number of investment firms suffered damage that forced them to relocate some of their operations and re-establish computer links.
The building housing the American Stock Exchange, which was closer to the World Trade Center than the NYSE, sustained enough damage that the trading floor isn’t usable. Its operations have been temporarily relocated at the NYSE and other regional markets.
The stock markets agreed to reopen together out of fairness for all traders and investors. Bond and some commodities markets reopened for limited trading Thursday.
Now that a resumption of trading is set, the remaining question is how the market, already fragile due to the weakened economy, will react to the terrorist attacks. Grasso joined some market analysts in predicting trading will be orderly, and that investors will be restrained, not panicky.
“I would suggest that investors have had this time frame to step back and take a reasoned approach, a thoughtful approach, to their investments,” he said.
Grasso also said there would be no constraints on trading, with limit orders being processed as well as short sales, those in which traders make money by betting the market goes down.
And, Grasso said he believes the NYSE will be able to handle any volume of trading, noting that the exchange has the capacity for five times the current average daily volume of about 1.2 billion shares.
The Securities and Exchange Commission, in a move designed to support the market, on Friday eased rules governing stock buybacks by companies. Many companies are expected to repurchase their stock – networking provider Cisco Systems has already announced plans to do so – as a signal of their confidence in the market and the country.
According to Grasso, the investment firms said Wednesday they were in a position to resume trading by week’s end, but “it was far more important from a human standpoint to make sure that nothing we did as a business interrupted the brave men and women” trying to rescue victims of the attack.
Grasso said most investment firms are now able to link with the exchange, and that by Monday, there should be “some connectivity to everyone who does business.”
About $100 billion worth of trades are conducted every day in the United States, bringing the estimated losses from the shutdown to $400 billion, according to the Securities Industry Association. Investment firms suffered many millions of dollars more in damage.
Still to be determined is how thousands of people will make it to work at the exchange and nearby financial firms, with traveling still curtailed in parts of the Financial District.
“We are very confident that whatever the number of people required … they will gain access via public transit,” Grasso said. But he asked NYSE employees to arrive earlier than usual “because as you might expect, security is going to be significantly tightened on Monday.”
Grasso said the NYSE planned Monday to honor the thousands of people killed in the trade center attack and another assault on the Pentagon.
The opening bell, traditionally rung by corporate executives or political leaders, will be sounded by representatives from the agencies heading rescue efforts at the trade center site: the Police and Fire departments, Emergency Medical Services and Port Authority of New York and New Jersey. The exchange floor will observe two minutes of silence and also join in singing “God Bless America.”
Copyright ©2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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