In 1998, Nancy visited the Financial District in NYC. What she witnessed twenty years ago on the New York Stock Exchange isn't exactly what you'd see today if you visited. Technology has changed the landscape, and more trading is done electronically rather than on the floor.
Personally, I've never been to the New York's Financial District. I have visited Wall Street, but it wasn't the one in NYC; it was while hiking The Narrows in Utah's Zion National Park. It was, I imagine, a quieter and more peaceful Wall Street than the one in NYC. Enjoy reading about Nancy's visit!
Wall Street...the name has become synonymous with investing. It is a real street with stop signs, subway portals and people, always people. On a recent trip to New York, we stayed a block off this famous street and just a couple of blocks away from the New York Stock Exchange.
The street was named for a wall that was built there to protect the city from northern attacks. That seems strange, for most of New York City lies to the north of Wall Street now. The famous Financial District is far downtown, close to the southern tip of Manhattan. But the first stock exchange did not begin in New York. It all started in Philadelphia in 1790. Quickly, though, stock traders meeting under a buttonwood tree in New York turned that city into the financial capitol of the world. In 1817, the name "New York Stock Exchange" was chosen, and, ever since, this area has been the focus of the financial world.
We visited the exchange one morning, arriving at about 8:30 a.m. Brokers were milling about in front of the building in their various colored jackets. It was obvious from the styling that, in New York, fashion and finance don't mix. Also, judging by the number of smokers furiously puffing away, tobacco stocks were doing well among this group.
Trading officially begins on the floor at 9:30 a.m. eastern time and ends at 4:00 p.m. That's 8:30 to 3:00 our time. What hours! But it is an action-packed six hours, with no official breaks, even though we spotted brokers taking some time outs during the day. Also, although we saw a few female brokers, this was mailing a male club.
The day we were there, part of the street in front of the exchange was closed off. (By the way, the NYSE is actually on Broad Street, not Wall Street.) Inside the enclosure, there was a platform full of appliances, and music was blaring in the streets. I asked a policeman what was going on. He said he thought they were announcing a new stock. The stock of the day was Maytag. We managed to get into the viewing area in time for the opening bell. Standing on the platform were the President of Maytag and, of all people, the Maytag repairman. Wall Street may have dodged high fashion, but they couldn't get past Madison Avenue. It seems hype is also part of high finance.
The opening bell began ringing at 9:29 and continued ringing until the large digital clock read 9:30, and trading was off. On the floor, various stations of computer banks are arranged. Around these are the specialists. They are the brokers who trade in a particular stock. Their job is to "maintain an orderly market in a stock." Considering the volatility of the last month, maybe that's why they all smoke.
Various brokerage houses rent booths on the floor. The booth is their home base from which orders are taken to the specialist for filling. The floor brokers are the runners. "On a typical day, a floor broker walks or runs an average of twelve miles crisscrossing the floor." The NYSE boasts that an average trade, from the time of entry to completion and reporting, takes only 22 seconds. That's a lot of trading in six hours!
The NYSE is a stock exchange. You can't buy bonds or commodities here. That occurs in other markets. But it's not the only U.S. stock exchange. The American Stock Exchange is also in New York. The NYSE has 1366 members and the AMEX has 661 members. There are more stringent requirements to be listed on the NYSE versus other markets, and it is considered "the" place to be. When you hear the Dow being quoted on the news each night, they are talking about an index of 30 leading NYSE stocks. And when you hear the news anchor mention the S&P, he is actually talking about an index of 500 leading NYSE stocks. There are actually about 2100 stocks listed on the NYSE.
There are other U.S. stock markets that don't occupy an actual space, unless you're talking about cyperspace. These are the electronic markets. You may hear them referred to as NASDAQ or OTC (Over the Counter). For these markets, there is no real trading floor. But here is where you'll find many up and coming companies, as well as many well-known, established companies. NASDAQ is generally thought to have a higher component of high-tech stocks, like Intel, Microsoft, and, even, WorldCom. Figures for the NASDAQ index are usually quoted on the nightly news as well.
For over 200 years, this system has worked. That doesn't mean it has always been rewarding. There have definitely been ups and downs. But it has worked and continues to work. It's obvious that the interests of the United State and of the entire world are at stake when that opening bell rings. Millions of investors the world over depend on this system. It is the mechanism that provides the money to fuel growth in our country. It's a delicate balance, and, yet, one with great resilience.
At the end of Wall Street, located on Broadway, stands a beautiful church. It's one of the oldest in New York City. Its bell also rings, not necessarily at 9:30 a.m. or 4 p.m., though. We didn't see much activity there. Does this signify our great faith in man's financial institutions? Or maybe, it points to what we really worship.
Regardless, the significance of the last 200 years somehow makes this phrase seem holllow... Today, on Wall Street...
--Nancy Lottridge Anderson, Ph.D., CFA, Mississippi Business Journal, October 5-11, 1998