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Silence on Wall Street: New York Stock Exchange prepares for all-electronic trading

“Another large, national, iconic symbol had to be closed down due to this virus. It is showing us that nobody is immune,” said one trader.
Image: Traders work the empty floor of the New York Stock Exchange on March 20, 2020. Trading will temporarily become all-electronic on March 23.
Traders work the empty floor of the New York Stock Exchange on March 20, 2020. Trading will temporarily become all-electronic on March 23.Spencer Platt / Getty Images

When the opening bell rings at the New York Stock Exchange on Monday, the trading floor will be empty. Because of the coronavirus outbreak, the exchange’s operations have been moved online indefinitely.

“Another large, national, iconic symbol had to be closed down due to this virus,” Jonathan Corina of Meridian Equity Partners, who trades for large mutual funds and pension funds, told NBC News. “It is showing us that nobody is immune.”

As the public health crisis worsened and market volatility increased, NYSE President Stacey Cunningham pushed back on calls to close the financial markets, and she strived to keep the exchange’s trading floor open.

Over the last two weeks, NYSE’s management implemented new “social distancing” protocols, restricted access, and asked hundreds of staffers to work remotely. But after an employee and a trader tested positive for COVID-19, NYSE’s parent company made what Cunningham is calling a “precautionary change.”

Several floor traders said the announcement was “bittersweet.”

“It was something that had to be done,” said Mark J. Muller, president and CEO of Mark J. Muller Equities, Inc., who has worked on the trading floor at 11 Wall Street for almost four decades. During his tenure, the market has closed a handful of times — after the terrorist attacks on Sept. 11, and Superstorm Sandy. But this is something different. Trading will continue, but not as it has for decades.

“It’s just surreal for me,” he says. “Because it is the first time I am not going to be at work.”

From its imposing columns to its ornate ceiling, the New York Stock Exchange makes an impression. Ralph Schlosstein, president and CEO of Evercore, remembers his first visit to the building. In high school, when he worked on the floor of the Philadelphia-Baltimore-Washington Stock Exchange, he took a day trip to see the New York Stock Exchange.

“At that time, it was the vibrating center of capitalism,” he says. “You go today, and there still are people on the floor, but it doesn’t have the energy it had 50 years ago.”

The New York Stock Exchange, which was founded in 1792, has a long history and a proud heritage, and it has continued to rely on men and women to execute some transactions in person even as its competitors have moved to fully electronic trading. These days, there is less yelling and paper, and the floor isn’t as crowded as it used to be.

“It’s really a bit of a facsimile of what it once was,” said Richard Sylla, a financial historian at NYU’s Stern School of Business and chairman of the Museum of American Finance. “It’s a bit of a fossil now.”

Floor traders see themselves as bulwarks against market volatility, but technology has improved dramatically — circuit breakers halt trading automatically when the market takes a deep dive. Some investors and outside observers, including Sylla, wonder if, by closing the trading floor temporarily, the exchange is crossing the Rubicon.

“It doesn’t make much of a difference if they shut [the floor],” he says. “The big question to me is whether they’ll open it up again.”

That is an existential question with which traders aren’t eager to wrestle, and NYSE’s management is adamant that, when the viral outbreak is under control, it will be back to business as usual.

But in the near term, institutional investors don’t seem worried.

“We are not concerned about the fact that there will not be specialists and traders on the floor, said Eric Freedman, Chief Investment Officer for U.S. Bank Wealth Management. “Our larger concern would be that the news flow causes liquidity issues.”

In recent days, the markets have swung violently after changes to monetary policy, and as negotiations over a fiscal stimulus package have started and stopped.

“It is obviously a tragedy for the individuals who are still working there,” said Schlosstein. “But for the liquidity of the markets, and for the ability of investors to execute transactions, I think it is predominantly symbolic.”

Treasury Secretary Steven Mnuchin says he and President Donald Trump don’t want markets to close. And that gives displaced floor traders some degree of comfort.

“If they were closing the markets, then I would be worried,” said Peter Tuchman of Quattro Securities, who has worked on the floor of the New York Stock Exchange for 35 years. “It’s important that people know the markets will be open. They will have access to their money. There will be trading.”

Photographers are drawn to Tuchman, who wears suits with sneakers. On any given day, his facial expressions seem to telegraph how most investors feel about the market’s performance.

On the first day of this new normal, he and his colleagues will work remotely. They will get up early, he says, to get a sense of what the market is likely to do, and they will make themselves available to their clients online and by phone.

“I will be wearing sneakers,” Tuchman says. “I am not sure I will put on a tie and a suit.”