NEW YORK – Remember when President Grover Cleveland ran for a second term or when Jack the Ripper spread terror in London or when you first read that Kaiser Wilhelm II had become German emperor?
Yes, it’s been that long.
On Monday, shortly after midday, the New York Stock Exchange announced it would close stock trading for a second day today due to a once-in-a-century storm. A once-in-a-124-year storm is more apt. The last time trading was halted for two consecutive days due to weather was in 1888.
This time, instead of snow drifts 40 feet high, surging water threatens to crest between 6 and 11 feet. And instead of the Blizzard of 1888, it is the more benign-sounding, but equally disruptive, Hurricane Sandy.
“It’s a monumental event, and we take it very seriously,” said Larry Leibowitz, chief operating officer of NYSE Euro- next, the company that operates the New York Stock Exchange. “It’s not a hyped-up drama.”
Leibowitz spoke briefly at 2 p.m. after a series of conference calls with stock brokerage firms, regulators and officials during which a “consensus” emerged to close markets for a second day. As for Wednesday, he said, he was “hopeful” the exchange would open.
Nasdaq, another major stock exchange, said it is also optimistic.
As the storm approached Manhattan midday Monday, water cascaded over seawalls near the iconic NYSE trading floor and a highway running along the island’s East Side was flooded in parts.
Areas around New York’s Financial District were part of a mandatory evacuation zone.
Inside the exchange, the lights were ablaze early Monday but, aside from security workers, few humans were present. There were no specialists on the floor matching buyers and sellers of stocks, and there were no traders.
There were more signs of life at the Duane Reade store a block or so away. One man was buying candles, scented, and asking for extra matches, as another walked out clutching a 12-pack of beer.
The uncertainty generated by the storm comes at the start of a big week in the United States. This is the last full week before the presidential election and culminates Friday with the release of monthly jobs data, which many analysts say could have an impact on the vote. Labor Department officials are still hopeful that the report can be released on time, but they acknowledge the storm could cause a delay.
“A significant swing in either direction is likely to be heavily reported in the media, potentially swinging the undecided voter,” said James Hughes, chief market analyst at Alpari, of the jobs figures.
Originally, the NYSE had planned to close just its exchange floor and allow traders to buy and sell stock electronically. Then it decided to shut down electronic trading, too. The NYSE said it was worried about putting staff who were needed to help run the electronic trading in danger.
NYSE’s Leibowitz said he was also worried about low trading volumes due to many investors taking the day off. The fear is that just a few trades could whip stock around like the storm outside, sending prices surging one minute or plunging the next. As automatic trading by computers has come to dominate stock trading, it was a fear voiced by other Wall Street experts.
“If you switch on the computers, they’ll be trading like it’s a normal day. They don’t need to deal with New Jersey Transit being out,” said Julian Bridgen, managing partner of Macro Intelligence 2 Partners, an investment consulting firm.
Bond trading will also be closed today.