U.S. stock exchanges and Wall Street banks are sending employees into Manhattan on Sunday to stay in hotels and coworkers’ homes, as markets prepare to open for business on Monday even as Hurricane Sandy brings public transportation to a halt.
Hurricane Sandy is expected to slam into the East Coast on Monday night, bringing torrential rains, high winds, severe flooding and power outages, forecasters said. The rare “super storm,” created by an Arctic jetstream wrapping itself around a tropical storm, could be the biggest to hit the U.S. mainland.
New York’s subway, bus and rail systems will suspend service by 7 p.m. EDT on Sunday (2300 GMT) which means there will be no public transportation into or within the city. About 8.5 million commuters use the Metropolitan Transit Authority’s rail, bus and subway lines daily.
New York City Mayor Michael Bloomberg closed public schools and ordered an evacuation of 375,000 people in coastal areas including the Battery Park neighborhood, just a few blocks from the New York Stock Exchange, City Island in the Bronx and Staten Island.
Spokesmen for NYSE Euronext and Nasdaq OMX Group said they still planned to open exchanges for trading on Monday, but would monitor the situation for any changes.
The New York Stock Exchange has arranged accommodations for essential staff near its lower-Manhattan headquarters, while other employees have been encouraged to work from home or alternate locations, said a person familiar with the situation.
“Everybody on Wall Street has hotels booked for essential personnel,” this person said, adding that the stock exchange would need several hundred people, compared to its usual 1,000, on the floor to keep trading going.
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.
“The word going around the floor on Friday was people should expect this to happen. In the event the exchange does not open, they will trade electronically though,” said Ken Polcari, managing director for ICAP Equities.
“If that happened, it’s probably going to be very muted volume,” he said.
A spokesman for Goldman Sachs, whose office is located within the evacuation area, said the firm has plans in place to ensure the safety of its people and that operations continue. Representatives of other large financial institutions, such as Citigroup Inc and JP Morgan Chase, described similar plans.
The NYSE has not had to delay the open for a weather-related issue since a blizzard hit the New York area in January 1996.
In August 2011, officials feared Hurricane Irene would flood lower Manhattan and cripple business in the world’s financial capital. Wall Street firms activated contingency plans and New York City ordered evacuations in lower Manhattan and shut down its mass transit system on a Saturday night in anticipation of the storm. But the flooding was minor and there were no major disruptions at the exchanges.
Before the storm passed, however, NYSE officials said while they planned to open, the final decision hinged on whether city subways were running and whether New York Harbor waters flooded low-lying downtown.
Flooding is one of the more likely worst-case scenarios that forecasters see as Sandy pushes water onto land Monday evening.
Sandy’s storm surge has the potential to flood New York city’s subway system if the storm arrives at or near Monday evening’s high tide around 9 p.m. EDT (0100 GMT), according to hurricane specialist Jeff Masters, who writes a Weather Underground blog. Monday is also a full moon, which creates an extra-high tide.
The NYSE has a backup power generator and said that should it have to shut down floor trading at 11 Wall Street, all NYSE-listed securities would trade on NYSE Arca, the company’s fully electronic exchange. NYSE’s servers are located in Mahwah, New Jersey, while Nasdaq has servers in Carteret, New Jersey.
“Preparations are in place for our U.S. markets to operate normally on Monday. If conditions change, notifications will be posted,” the New York Stock Exchange said in a statement on its website.
Nasdaq OMX also said it has plans in place to ensure markets operate normally on Monday and Tuesday.
Both exchanges are in contact with trading firms and regulators, which include the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority (FINRA), about the potential impact of the storm, said people with knowledge of the plans.
The Securities Industry and Financial Markets Association said it has not made any recommendations to close on Monday.
“SIFMA is currently monitoring the storm’s projected path and we are in contact with public authorities and our members as we assess the possible impact of the storm to the financial services sector within the NYC area,” SIFMA spokeswoman Katrina Cavalli said on Sunday morning in an e-mailed statement.
Some financial industry events have been postponed. The SIFMA Internal Auditors Society Annual Conference scheduled for Monday and Tuesday in New York has been delayed to December. The Bond Buyer’s 501(c)3 SuperConference which was to take place Oct. 28-30, will also be postponed.
Was this article valuable?
Here are more articles you may enjoy.