NYSE: The World Puts Its Stock In Us.
The NYSE, on Wall Street
in downtown Manhattan
, is undoubtedly the most important stock exchange
in the modern world. There are currently some 2,800 companies on the exchange, trading around $12 trillion
in six million transactions every year.
It traces its history back to 1790, when the federal government of the United States issued $90 million in war bonds to finance the Revolutionary War. This was the beginning of the investment market in America. Two years later, a group of 24 New York investors signed the Buttonwood Agreement to trade shares of the Bank of New York underneath a tree on Wall Street, and the NYSE was born.
The investors didn't have a building until 1817, and the first NYSE building was destroyed in the Great Fire of 1835. After operating in another headquarters for several years, they moved back downtown in 1865, taking up space in a new building at 10-12 Broad Street before moving to their current home at 18 Broad in 1903.
The first "Big Board" used to display stock prices was an electromechanical Rube Goldberg device built in 1881. It was replaced by a digital board in 1966, followed by a more advanced display in 1984 that is still used today. In 1996, the NYSE set up a wireless data network on its floor, and its brokers now use handhelds to keep track of what's going on in the market.
Speaking of the floor, there are actually five trading rooms at the exchange, which have been added one by one as demand has increased. On the floor, each company traded is assigned to one of twenty trading posts, each with some 400 trading positions, and an attached specialist. Whenever a stock is bought or sold, the floor broker goes to the trading post and haggles with other brokers under the eye of the specialist: once a price is agreed on, the stock changes hands, and the price is updated on CNBC and Bloomberg terminals across the globe. There are computers to help with all this, but still, over 3,000 people are scurrying about the New York trading floor during any given business day, as opposed to automated exchanges like Tokyo and the Nasdaq where not much happens in the flesh at all.
Initially, seats on the exchange—that is, the rights to trade shares there—were for life. In 1868, they became salable, and their price has risen steadily ever since. Today, a seat on the NYSE costs anywhere from two to two and a half million dollars: the record sale price of an NYSE seat was $2.65 million in 1999.
The NYSE is usually tracked by the Dow Jones Industrial Average, which was first published by the Wall Street Journal in 1896 (it was just under 41 points at the time). Another index used is the NYSE Composite, which treats the market close on December 31, 1965 as 50: in 2000, the composite reached its all-time high of 678.
Some other facts about the NYSE:
Highest daily volume in history: September 17, 2001, 2.37 billion shares traded
Largest block transaction in history: 52.7 million shares of Amoco on December 31, 1998
Longest closure in history: 10 days during the Bank Holiday of Franklin D. Roosevelt, 1933
#2: 9 days during the Panic of 1873
#3: 4 days after the attacks of September 11, 2001
Number of bells used to open and close trading: 4, each 18 inches in diameter
Number of text messages sent and received each day on the floor: 5 million
Capitalism is awesome. http://www.nyse.com