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NEW YORK: New York-based stock exchanges are sending officials into Manhattan to stay in hotels and coworkers’ homes as the NYSE and Nasdaq prepare to open for business today, even as Hurricane Sandy closes off public transportation links.
Hurricane Sandy is expected to slam into the East Coast tonight, 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 US mainland.
New York’s subway, bus and rail systems will suspend service, Governor Andrew Cuomo said, 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.
A spokesman for NYSE Euronext said after the Cuomo announcement that the New York Stock Exchange was monitoring the situation but still planned to open for trading today. A spokesman for Nasdaq OMX Group referred Reuters’ inquiry to a previous statement that said the Nasdaq would open for trading as normal on Monday.
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.
The major exchanges and most big trading firms have alternate trading facilities if downtown New York 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. “Preparations are in place for our US markets to operate normally today. If conditions change, notifications will be posted,” the New York Stock Exchange said in a statement on its website.
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.
Nasdaq OMX also said it has plans in place to ensure markets operate normally today and tomorrow.
Both exchanges are in close contact with trading firms and regulators, which include the US 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 today. One of New York’s largest financial employers, Citigroup Inc, said it has contingency plans, including using alternative work locations, to keep its operations going. The bank has about 24,000 people working in New York City.
Trading volumes are likely to be lighter than usual, but as most operations now are handled electronically, it remains to be seen whether there will be an interruption. 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. Some financial industry events have been postponed. Today is also a full moon, which creates an extra-high tide.