THE JEENYUS CORNER
By John McCrank and Rick Rothacker
(Reuters) – Stock market executives, regulators and brokers have agreed to close the U.S. stock markets on Tuesday because of Hurricane Sandy, with an official announcement coming shortly, said people who were on an industry-wide call on the matter on Monday.
Every effort is being made to reopen markets on Wednesday, but a final decision has not been made yet, one of the people said.
The decision involved senior leadership of the exchanges, executives from brokerage firms and officials from the U.S. Securities and Exchange Commission.
The U.S. stock market’s closure on Monday was its first weather-related shutdown in 27 years.
Bond markets, which closed at noon EDT on Monday, will not reopen on Tuesday, a trade group said.
“It doesn’t make sense to put people in harm’s way or to only have half a market,” said Nicholas Colas, chief market strategist at ConvergEx Group in New York. “If just the electronic market was open, that wouldn’t provide enough interest, with everything else still closed.”
Equities trading executives said they were spending the day Monday pressing NYSE Euronext (NYX.N) and the Nasdaq OMX (NDAQ.O) to clearly communicate their plan to avoid a repeat of Sunday night.
Market participants and regulators decided late on Sunday to shut the stock and options markets, reversing an earlier plan to keep electronic trading going on Monday, leaving some people complaining about the confusion it caused.
The biggest problem with the New York Stock Exchange’s initial plan to trade exclusively over its ARCA electronic system was that the contingency plan that it had created in March had not been vetted by many brokerage firms, the sources said.
The decision on whether to keep markets closed on Tuesday comes as Hurricane Sandy began battering the U.S. East Coast on Monday with fierce winds and driving rain. The monster storm shut down transportation, shuttered businesses and sent thousands scrambling for higher ground hours before the worst was due to strike.
In New York, the mass transit system was shut down on Sunday evening, and many Wall Street employees were working from home, although major financial services firms were open for business at least with skeletal staff. Flooding is already hitting parts of Lower Manhattan and parts of New Jersey even before the storm makes landfall.
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