The two US principal equities markets, the New York Stock Exchange and the Nasdaq, plan to test communications networks tomorrow for a planned Monday morning opening. The tests are designed to ensure they will work with "market-making" brokerages moved to alternate locations after the World Trade Center disaster.
Clearinghouses settle the payment of transactions made on the stock markets, and at least one said today that it's working to move its telecommunications lines to an alternate network.
NYSE Chairman and CEO Richard Grasso held a news conference with leaders of other stock exchanges and governmental agencies late yesterday in which he said the market would reopen at 9:30 a.m. EDT Monday.
"In the course of the next few days, we will, together with the industry, do all the required stress-testing of our systems from an infrastructure standpoint," he said.
Grasso and others had just met with leaders of the securities industry and city and state officials, as well as the chair of the Federal Communications Commission, the assistant secretary of the U.S. Treasury and the president of the Federal Reserve Bank.
Wick Simmons, CEO of Washington-based Nasdaq Stock Market Inc., said the results of tomorrow's tests and discussions among market leaders following those tests will ultimately determine whether the markets make their planned reopening.
"Testing is particularly important to us ... because, as you might imagine, those firms that were located in the financial district are going to be, in most cases, operating from what we call disaster recovery sites," Simmons said. "Some of these will be across the river in New Jersey. Some of them will be further out of town. All of the capacity of those sites and connectivity as a whole to the markets needs to be tested."
Simmons noted that Consolidated Edison Inc. lost a great deal of wire capacity in southern Manhattan because a major power plant was beneath one of the downed World Trade Center buildings.
"They have plans that will work out over the next three days to make sure the requisite power is [there]," Simmons said.
Grasso said he is also confident that city, state and private firms will provide the transportation necessary to bring in the 75,000 to 100,000 people expected to work on the exchanges and related brokerages on Monday.
"We've already seen restoration of subway service on the eastern, southern tip of Manhattan," he said. "And while no one can predict when the westerly routes will be reopened, it is clear that the combined effort of subway and bus and whatever private sector incremental service will be needed will be there Monday morning to ensure the right number of people populate our firms."
The American Stock Exchange, located just hundreds of feet from the former site of the Trade Center, will be bunking up with the NYSE on Monday. Although its main building at 86 Trinity Place "suffered no structural damage" and its trading systems "are fully operational and functional," because of its proximity to the disaster site, the exchange will trade on the NYSE floor.
"They will trade in competition with the New York Stock Exchange. They'll just be a bit closer than they've traditionally been," Grasso said.
Clearinghouses also expressed confidence that they will be able to handle network traffic from the market reopening.
The Depository Trust & Clearing Corp. (DTCC), a holding company that oversees two principal subsidiaries -- The Depository Trust Co. and National Securities Clearing Corp. -- was forced to transfer operations to an alternate data center after the terrorist attack.
Spokesman Steve Letzler said the company's 55 Water St. location, adjacent to the World Trade Center, is intact; but connectivity and telecommunications systems were affected by the attack.
"We've been re-establishing connectivity and telecommunications to our alternate data center, and we should be switched over to that center soon," Letzler said.
The DTCC, with more than US$23 trillion in securities, provides the primary infrastructure for the clearance, settlement and custody of the vast majority of equity, corporate debt and municipal bond transactions in the U.S.
Jeffrey P. Neubert, President and CEO of New York Clearing House, said today that "all of the payment systems operated by the New York Clearing House remained operational during the tragic events on Tuesday."
More than $1.3 trillion a day moves through the New York Clearing House's two primary payment channels, the ClearingHouse Interbank Payments System and the Electronic Payments Network, the largest automated clearinghouse in the country.
The clearinghouse was, however, forced to suspend electronic check presentment and payment operations "due to logistical problems related to curtailed air transportation and the situation in lower Manhattan," Neubert said in a statement.
"We are monitoring the situation with our member banks and aviation officials each day to determine the best time to resume operations," he added.