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New York Stock Exchange

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... of all stocks traded, not just the 30 stocks in the Dow Jones Industrial Average ... 1954 - Dow surpasses 1929 peak. 1966 - NYSE creates Common Stock Index ... – PowerPoint PPT presentation

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Title: New York Stock Exchange


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
Chronology
  • 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
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