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New York Stock Exchange Economics 521 Elisa Claire Weaver 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.

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New york stock exchange l.jpg

New York Stock Exchange

Economics 521

Elisa Claire Weaver


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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.


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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


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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


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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.


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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


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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


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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


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