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New York Stock Exchange

New York Stock Exchange

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New York Stock Exchange

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  1. New York Stock Exchange Economics 521 Elisa Claire Weaver

  2. Stock Market • Owning stock means you own a slice of a public company. • When a company needs to raise money to expand, it sells stocks or bonds to the public through the financial markets. • Individuals become investors in this company by purchasing those securities. • Central to this activity is the NYSE marketplace, where billions of dollars worth of stock change hands each day.

  3. New York Stock Exchange • Largest stock exchange in the world by dollar volume • Second largest by number of companies • Global capitalization of $23 trillion as of September 30, 2006 • Founded on March 8, 1817

  4. History • May 17, 1792 - Buttonwood Agreement • Signed by 24 stock brokers • Two provisions: • The brokers were to deal only with each other. Thereby eliminating the auctioneers, and • The commissions were to be .25%. • March 8, 1817 - drafted constitution, named itself the "New York Stock & Exchange Board". • In 1863, this name was shortened to its modern form, "New York Stock Exchange". • Anthony Stockholm was elected as the first president

  5. Membership • Until recently, members could only join by purchasing existing seats, which were limited to a total of 1,366. • In December of 2005, the NYSE went both electronic and public, by merging with the already publicly traded Archipelago electronic stock exchange. • The new merged company is called the NYSE Group, Inc., and the seats of the NYSE translated into shares of stock which are now traded under the ticker symbol NYX.

  6. Continuous Auction Format • Prior to the 2005 merger, there was one specific location on the trading floor where each listed stock traded • This human interaction differentiates the NYSE from fully electronic markets • Recently adopted a hybrid market structure

  7. NYSE Composite Index • Created in the mid-1960s to reflect the value of all stocks traded, not just the 30 stocks in the Dow Jones Industrial Average • Base value was 50 points equal to the 1965 yearly close • 2003 new base value of 5,000 equal to the 2002 yearly close • Lifetime high 9,188.17 - Dec 28, 2006 • Lifetime low 347.77 - October 1974

  8. 1792 - The first traded company on the NYSE 1817 - Rules and a Constitution - The New York Stock and Exchange Board 1867 - The First Stock Ticker 1896 - DJIA published by The Wall Street Journal 1903 - NYSE moves into its new quarters at 18 Broad Street 1907 - Panic of 1907 1914 - World War I causes longest exchange shutdown 1915 - Market price in $$ 1929 - Central Quote System 1929 - Black Thursday (10/24) and Black Tuesday (10/29) 1943 - Women Work on Trading Floor 1949 - Longest Bull Run begins 1954 - Dow surpasses 1929 peak 1966 - NYSE creates Common Stock Index 1966 - Floor data fully automated 1970 - Securities Investor Protection Corporation established 1971 - NYSE Not-for-Profit 1972 - DJIA Closes Over 1,000 1977 - Foreign Brokers/Dealers are admitted 1979 - New York Futures Exchange established 1985 - Ronald Reagan visits NYSE 1987 - Largest One-Day Percentage Drop of DJIA (Black Monday, 19 October) 1991 - Dow exceeds 3,000 1992 - NYSE celebrates its Bicentennial 1996 - Real-time Ticker introduced 1999 - DJIA tops 10,000 2000 - First Global Index Launches 2001 - Trading in Fractions (n/16) ends, replaced by decimals (decimalisation) 2001 - Terrorist Attacks on World Trade Center (September 11): NYSE closed for 4 session days 2003 - NYSE Composite Index relaunched 2006 - NYSE and ArcaEx merge - NYSE Group, Inc. For-profit, publicly owned company 2006 - NYSE Group buys Euronext, creating the first trans-Atlantic stock exchange group Chronology