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The New York Stock Exchange (NYSE) is a stock exchange based in New York City, New York. It is the largest stock exchange in the world by dollar value of its listed companies' securities.[1] As of October 2008, the combined capitalization of all domestic New York Stock Exchange listed companies was US$10.1 trillion.[2]

 

The NYSE is operated by NYSE Euronext, which was formed by the NYSE's 2007 merger with the fully-electronic stock exchange Euronext. The NYSE trading floor is located at 11 Wall Street and is composed of four rooms used for the facilitation of trading. A fifth trading room, located at 30 Broad Street, was closed in February 2007. The main building, located at 18 Broad Street, between the corners of Wall Street and Exchange Place, was designated a National Historic Landmark in 1978,[3] as was the 11 Wall Street building.[4][5][6]

History

 

The origin of the NYSE can be traced to May 17, 1792, when the Buttonwood Agreement was signed by 24 stock brokers outside of 68 Wall Street in New York under a buttonwood tree on Wall Street. On March 8, 1817, the organization drafted a constitution and renamed itself the "New York Stock & Exchange Board". Anthony Stockholm was elected the Exchange's first president. (For other presidents, see List of presidents of the New York Stock Exchange.)

 

The first central location of the Exchange was a room, rented in 1817 for $200 a month, located at 40 Wall Street. After that location was destroyed in the Great Fire of New York (1835), the Exchange moved to a temporary headquarters. In 1863, the New York Stock & Exchange Board changed to it's current name, the New York Stock Exchange. In 1865, the Exchange moved to 10-12 Broad Street.

 

The volume of stocks traded increased six-fold in the years between 1896 and 1901, and a larger space was required to conduct business in the expanding marketplace.[8] Eight New York City architects were invited to participate in a design competition for a new building; ultimately, the Exchange selected the neoclassic design submitted by architect George B. Post. Demolition of the Exchange building at 10 Broad Street, and adjacent buildings, started on May 10, 1901.

 

The new building, located at 18 Broad Street, cost $4 million and opened on April 22, 1903. The trading floor, at 109 x 140 feet (33 x 42.5 m), was one of the largest volumes of space in the city at the time, and had a skylight set into a 72-foot (22 m)-high ceiling. The main façade of the building features six tall Corinthian capitals, topped by a marble sculpture by John Quincy Adams Ward, called “Integrity Protecting the Works of Man”. The building was listed as a National Historic Landmark and added to the National Register of Historic Places on June 2, 1978.[9]

 

In 1922, a building for offices, designed by Trowbridge & Livingston, was added at 11 Broad Street, as well as a new trading floor called "the garage". Additional trading floor space was added in 1969 and 1988 (the "blue room") with the latest technology for information display and communication. Yet another trading floor was opened at 30 Broad Street in 2000. As the NYSE introduced its hybrid market, a greater proportion of trading came to be executed electronically, and due to the resulting reduction in demand for trading floor space, the NYSE decided to close the 30 Broad Street trading room in early 2006. As the adoption of electronic trading continued to reduce the number of traders and employees on the floor, in late 2007, the NYSE closed the rooms created by the 1969 and 1988 expansions.

 

The Stock Exchange Luncheon Club was situated on the seventh floor from 1898 until its closure in 2006. [10]

 

Events

 

See also: Black Monday (1987) and October 27, 1997 mini-crash

 

The exchange was closed shortly after the beginning of World War I (July 31, 1914), but it partially re-opened on November 28 of that year in order to help the war effort by trading bonds, and completely reopened for stock trading in mid-December.

 

On September 16, 1920, a bomb exploded on Wall Street outside the NYSE building, killing 33 people and injuring more than 400. The perpetrators were never found. The NYSE building and some buildings nearby, such as the JP Morgan building, still have marks on their facades caused by the bombing.

 

The Black Thursday crash of the Exchange on October 24, 1929, and the sell-off panic which started on Black Tuesday, October 29, are often blamed for precipitating the Great Depression of 1929. In an effort to try to restore investor confidence, the Exchange unveiled a fifteen-point program aimed to upgrade protection for the investing public on October 31, 1938.

 

On October 1, 1934, the exchange was registered as a national securities exchange with the U.S. Securities and Exchange Commission, with a president and a thirty-three member board. On February 18, 1971 the non-profit corporation was formed, and the number of board members was reduced to twenty-five.

 

One of Abbie Hoffman's well-known protests took place on August 24, 1967, when he led members of the Yippie movement to the gallery of the New York Stock Exchange (NYSE). The protesters threw fistfuls of dollars (most of the bills were fake) down to the traders below, some of whom booed, while others began to scramble frantically to grab the money as fast as they could. Hoffman claimed to be pointing out that, metaphorically, that's what NYSE traders "were already doing." "We didn't call the press," wrote Hoffman, "at that time we really had no notion of anything called a media event." The press was quick to respond and by evening the event was reported around the world. Since that incident, the stock exchange has spent $20,000 to enclose the gallery with bulletproof glass.

 

On October 19, 1987, the Dow Jones Industrial Average (DJIA) dropped 508 points, a 22.6% loss in a single day, the second-biggest one-day drop the exchange had experienced, prompting officials at the exchange to invoke for the first time the "circuit breaker" rule to halt all trading. This was a very controversial move and led to a quick change in the rule; trading now halts for an hour, two hours, or the rest of the day when the DJIA drops 10, 20, or 30 percent, respectively. In the afternoon, the 10% and 20% drops will halt trading for a shorter period of time, but a 30% drop will always close the exchange for the day. The rationale behind the trading halt was to give investors a chance to cool off and reevaluate their positions. Black Monday was followed by Terrible Tuesday, a day in which the Exchange's systems did not perform well and some people had difficulty completing their trades.

 

There was a panic similar to many with a fall of 7.2% in value (554.26 points) on October 27, 1997 prompted by falls in Asian markets, from which the NYSE recovered quickly.

 

On January 26, 2000, an altercation during filming of the music video for Sleep Now in the Fire, which was directed by Michael Moore, caused the doors of the exchange to be closed and the band, Rage Against the Machine, to be escorted from the site by security,[11] after band members attempted to gain entry into the exchange.[12] Trading on the exchange floor, however, continued uninterrupted.[13]

 

 

Security after the September 11 attacks

 

 

The NYSE was closed from September 11 until September 17, 2001 as a result of the September 11 attacks.

 

On September 17, 2003, NYSE chairman and chief executive Richard Grasso stepped down as a result of controversy concerning the size of his deferred compensation package. He was replaced as CEO by John S. Reed, the former Chairman of Citigroup.

 

The NYSE announced its plans to acquire Archipelago on April 21, 2005, in a deal intended to reorganize the NYSE as a publicly traded company. NYSE's governing board voted to acquire rival Archipelago on December 6, 2005, and become a for-profit, public company. It began trading under the name NYSE Group on March 8, 2006. A little over one year later, on April 4, 2007, the NYSE Group completed its merger with Euronext, the European combined stock market, thus forming the NYSE Euronext, the first transatlantic stock exchange.

 

Presently, Marsh Carter is Chairman of the New York Stock Exchange, having succeeded John S. Reed and the CEO is Duncan Niederauer, having succeeded John Thain.

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  January 01, 2007  


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