NEW YORK – New York-based stock exchanges are sending officials into Manhattan on Sunday to stay in hotels and coworkers' homes as the NYSE and Nasdaq prepare to open for business on Monday, even as Hurricane Sandy closes off public transportation links.
Hurricane Sandy is expected to slam into the East Coast on Monday night, bringing torrential rains, high winds, severe flooding and power outages, forecasters said. The rare "super storm," created by an Arctic jetstream wrapping itself around a tropical storm, could be the biggest to hit the U.S. mainland.
New York's subway, bus and rail systems will suspend service by 7 p.m. EDT on Sunday, Governor Andrew Cuomo said, which means there will be no public transportation into or within the city. About 8.5 million commuters use the Metropolitan Transit Authority's rail, bus and subway lines daily.
A spokesman for NYSE Euronext said after the Cuomo announcement that the New York Stock Exchange was monitoring the situation but still planned to open for trading on Monday. A spokesman for Nasdaq OMX Group referred Reuters' inquiry to a previous statement that said the Nasdaq would open for trading as normal on Monday.
The New York Stock Exchange has arranged accommodations for essential staff near its lower-Manhattan headquarters, while other employees have been encouraged to work from home or alternate locations, said a person familiar with the situation.
The major exchanges and most big trading firms have alternate trading facilities if downtown New York is inaccessible, but the storm's wide path may affect a number of sites in the New York metropolitan area. Authorities have warned of possible widespread power outages that could last for days.
"Preparations are in place for our U.S. markets to operate normally on Monday. If conditions change, notifications will be posted," the New York Stock Exchange said in a statement on its website.
NYSE has a backup power generator and said that should it have to shut down floor trading at 11 Wall Street, all NYSE-listed securities would trade on NYSE Arca, the company's fully electronic exchange. NYSE's servers are located in Mahwah, New Jersey, while Nasdaq has servers in Carteret, New Jersey.
Nasdaq OMX also said it has plans in place to ensure markets operate normally on Monday and Tuesday.
Both exchanges are in close contact with trading firms and regulators, which include the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority (FINRA), about the potential impact of the storm, said people with knowledge of the plans.
The Securities Industry and Financial Markets Association said it has not made any recommendations to close on Monday.
"SIFMA is currently monitoring the storm's projected path and we are in contact with public authorities and our members as we assess the possible impact of the storm to the financial services sector within the NYC area," SIFMA spokeswoman Katrina Cavalli said on Sunday morning in an e-mailed statement.
One of New York's largest financial employers, Citigroup Inc, said it has contingency plans, including using alternative work locations, to keep its operations going. The bank has about 24,000 people working in New York City.
Trading volumes are likely to be lighter than usual, but as most operations now are handled electronically, it remains to be seen whether there will be an interruption. The NYSE has not had to delay the open for a weather-related issue since a blizzard hit the New York area in January 1996.
Some financial industry events have been postponed. The SIFMA Internal Auditors Society Annual Conference scheduled for Monday and Tuesday in New York has been delayed to December.
Sandy's storm surge has the potential to flood New York city's subway system if the storm arrives at or near Monday evening's high tide around 9 p.m. EDT, according to hurricane specialist Jeff Masters, who writes a Weather Underground blog.
Monday is also a full moon, which creates an extra-high tide.
In August 2011, officials feared Hurricane Irene would flood lower Manhattan and cripple business in the world's financial capital. Wall Street firms activated their contingency plans and New York City ordered evacuations in lower Manhattan and shut down its mass transit system on a Saturday night in anticipation of the storm. But the flooding was minor and there were no major disruptions at the exchanges.
Before the storm passed, however, NYSE officials said while they planned to open, the final decision hinged on whether city subways were running and whether New York Harbor waters flooded low-lying downtown. Flooding is one of the more likely worst-case scenarios that forecasters see as Sandy pushes water onto land Monday evening.
(Reporting by John McCrank, David Gaffen, Caroline Humer and David Henry; Editing by Jennifer Merritt, Tiffany Wu and Maureen Bavdek)