Wall Street to open Monday as storm hobbles NYC


Posted at Oct 29 2012 10:26 AM | Updated as of Oct 29 2012 09:42 PM


NEW YORK (UPDATE) - Wall Street firms prepared to open for business on Monday at least with skeletal staffing, booking hotel rooms for key employees and leaning on offices in other cities, as Hurricane Sandy forced the New York mass transit system to shut down, leaving tens of thousands of employees stuck at home.

For now, executives, traders and bankers are expecting a light trading day on Monday - and with the storm still a day away from hitting the city, questions remained about whether markets would be able to open on Tuesday.

Hurricane Sandy is expected to slam into the U.S. East Coast on Monday night, bringing torrential rains, high winds, severe flooding and power outages. The rare "super storm" - created by an Arctic jet stream wrapping itself around a tropical storm - could be the biggest to hit the U.S. mainland, forecasters said.

Some offices in lower Manhattan's Financial District are in evacuation zones and most non-critical staff and employees who don't rely on high-speed systems, including some investment bankers, were asked to work from home.

NYSE Euronext's New York Stock Exchange said it is closing its trading floor in New York, but electronic trading will continue normally. Fixed income markets will close at noon on Monday, a trade group said.

Wall Street banks, including Goldman Sachs Group Inc and Citigroup Inc, activated their emergency plans, which many firms first put in place after the Sept. 11, 2001, attacks.

Banks are putting key staff, including some traders, in hotels and also are relying on others who live near the bank's offices.

Monday will mark the first time the NYSE has traded completely electronically. It last closed its trading floor for weather reasons in 1985, when Hurricane Gloria hit New York.

The exchange will evaluate on "a day-to-day basis" as to when it will reopen the floor, said Larry Leibowitz, NYSE's chief operating officer, but if forecasts are correct, the weather may worsen on Tuesday.

The decision to close the Big Board's trading floor came after a series of discussions with floor brokers, employees, city officials and others. The number of people in favor of keeping the floor open and the number opposed were about even, Leibowitz said.

Leibowitz, who lives in lower Manhattan but not in the evacuation zone, said he would show up for work on Monday but expected trading to be relatively light.

"I will be there ... I will probably be singing a solo on the trading floor," he said.


The scramble on Wall Street started early as New York Governor Andrew Cuomo announced the subway, bus and rail system in the city would begin to close at 7 p.m. EDT on Sunday (2300 GMT).

About 8.5 million commuters use the Metropolitan Transit Authority's transit lines daily, meaning most Wall Street employees would be unable to get to work. New York City Mayor Michael Bloomberg also closed public schools and ordered an evacuation of 375,000 people in coastal areas, including downtown offices of banks such as Citigroup.

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.

Wall Street was spared the worst of Hurricane Irene in August last year. Officials had feared Hurricane Irene would flood lower Manhattan and cripple business in the world's financial capital, but the flooding was minor and there were no major disruptions at the exchanges.


CME Group Inc said it was suspending floor trade on Monday at NYMEX headquarters, the world's biggest oil and energy futures and options market. But electronic trade at all of CME will open at their regularly scheduled time at Globex and ClearPort, CME's online electronic platforms.

The Securities Industry and Financial Markets Association said it is recommending an early close of noon EDT on Monday for the trading of U.S. dollar-denominated, fixed-income securities. It said its member firms should decide for themselves whether their fixed-income departments remain open for trading.

The foreign exchange market's activity generally follows the fixed income markets. With the SIFMA recommendation, it is likely that currency market volumes will dry up around midday as well.

The New York Federal Reserve has calls scheduled for early Monday morning with dealers to see what each dealer is doing to deal with the storm, and will modify its market activities accordingly.

In Washington, the Commerce Department said it would post its report on personal income and spending for September on its website at 8:30 a.m. as scheduled, even though the federal government was closed.

The Federal Reserve said it would postpone its regularly scheduled releases, including its weekly report on selected interest rates and daily commercial paper data. The Fed said it would release the data when federal offices in the Washington area reopened.

One bond trader at a large Wall Street firm said the New York-based banks would route orders through their Midwest and West Coast offices. West Coast employees were planning to get up early, he said, while colleagues in Europe were expecting a long working day on Monday.

Volumes were, however, expected to be lower and orders may be harder to fill, the trader added.


Goldman, whose office in lower Manhattan is in one of the areas to be evacuated, told employees that it would open for business, with some staff working from offices in Greenwich, Connecticut, and in Princeton, New Jersey. It also plans to use teams in London and other locations around the world for additional support.

Citigroup has its trading floor near the Hudson River in the Tribeca neighborhood in Manhattan, putting it in a flood zone. The bank is operating from a backup trading floor in New Jersey and will shuttle critical employees there as necessary. It said "non-critical personnel should invoke their work-from-home strategies."

Many of JPMorgan Chase & Co Inc's traders live in Manhattan and will be in the office on Monday. The bank expects to be fully operational, using backup trading and technology from Europe or Asia as needed, a spokeswoman said.

One smaller Wall Street firm is shifting critical operations to an office in the Midwest and telling employees in New York to work from home, said an executive at the firm.

The executive said he has no problem with exchanges being open on Monday. "It's all virtual now anyway," he said.

For many investment bankers and private equity executives, working from home will make the most sense. Blackstone Group planned to close its office on Monday.

Hurricane Sandy also led to some events being canceled or postponed. Citigroup Prime Brokerage postponed a hedge fund event that had been scheduled for Tuesday.