Advertisement

Markets

Wall Street Expects Normal Operations

The NYSE and Nasdaq plan for business as usual after the widespread Northeast power outage.

August 15, 2003|From Times Staff and Wire Reports

The New York Stock Exchange and Nasdaq said they expected to open as usual this morning despite Thursday's massive power outage in the Northeast. They said no trading data were lost when the markets lost power only minutes after the official closing time of 4 p.m. EDT.

Even so, there was some uncertainty among traders about whether trading would resume normally today and whether the outage -- which struck shortly after the official close -- might disrupt the settlement of trades overnight.

"People are just trying to figure out what to do if this power doesn't get restored very quickly, and we're just trying to figure out what's going to happen" today, Keith Keenan, vice president of institutional trading at brokerage Wall Street Access, told Reuters.

There also were concerns about how traders would get to their posts on Wall Street if New York's mass transit system, which was crippled by the power outage, was still not functioning.

Treasury bond yields initially plunged in after-hours trading as investors, worried that the blackout could be the work of terrorists, rushed to the safety of government securities. But yields rebounded somewhat after officials said the power outage wasn't terrorist-related.

U.S. stock futures were lower Thursday night, pointing to a weaker opening for stocks today. Standard & Poor's 500 stock index futures for September were off 4.70 points at 983, while Nasdaq futures were off 6 points at 1,239.50.

Meanwhile, Asian markets, which can provide a preview of how markets in the United States will open, were mixed in early trading. Japan's Nikkei-225 stock index was off 0.6% and Hong Kong's Hang Seng index was up 0.7%.

Some glitches in after-hours trading were reported late Thursday, and volumes were unusually low.

Fidelity Investments, the biggest U.S. mutual fund company, said it stopped extended-hours trading at 4:58 p.m. EDT because its electronic network was unable to handle the orders.

Boston-based Fidelity uses an electronic trading network run by Archipelago, spokeswoman Anne Crowley told Bloomberg News.

Archipelago's network buys and sells orders and acts as a gateway to other electronic networks.

Even though utility regulators said the outage wasn't caused by a terror attack, traders said Wall Street was edgy nonetheless.

"If there's not some decent, plausible explanation for why it happened in multiple cities, and there's some kind of cloud of concern about terrorism left out there before the market opens, of course it's going to have a negative impact on psychology," Gary Wedbush, head of trading at regional investment bank Wedbush Morgan in Los Angeles, said.

One trader said that among the biggest problems facing Wall Street was processing trades overnight for options set to expire this morning.

The U.S. stock markets have not missed a regular session since shutting for four days immediately after the Sept. 11 terrorist strikes on the World Trade Center and the Pentagon.

A NYSE spokesman said the Big Board "is prepared to open [today], on generator power if necessary." The NYSE's data processing subsidiary, Securities Industry Automation Corp., was operating Thursday at normal capacity on generator power.

A spokesman for Nasdaq said its computer facility was operating on backup power as well. If the outage continues this morning, he said, "Nasdaq, from a technological standpoint, will be ready."

Fixed-income trading also was expected to be normal today. The U.S. Bond Market Assn. said Thursday that it recommended the bond market operate standard hours.

The New York Federal Reserve Bank, which conducts financial transactions for the Treasury, was operating as usual, a spokesman for the bank said.

Advertisement
Los Angeles Times Articles
|
|
|