NYSE and all US markets to remain closed on Monday 10/29/12

• US Markets closed on Monday 10/29/12 and possibly Tuesday
• The decision, made late Sunday night, leaves the American stock markets closed for weather conditions for the first time in nearly three decades.

All United States stock and options markets will close on Monday as Hurricane Sandy approaches, reversing course as Wall Street braces for the storm to barrel through the heart of the country’s financial center.

The decision, made late Sunday night, leaves the American stock markets closed for weather conditions for the first time in nearly three decades. The New York Stock Exchange had previously planned on closing only its physical trading floor, while allowing for trading on its Arca electronic exchange. It has now decided to halt all trading.

Sandbags surround the entrance to the New York Stock Exchange in Lower Manhattan on Sunday night in anticipation of Hurricane Sandy. The NYSE has cancelled all trading until the storm danger passes.

NYSE status alert

Nasdaq, ICE Top Deutsche Boerse With $11.3 Billion NYSE Bid

Nasdaq OMX Group Inc. (NDAQ) and IntercontinentalExchange Inc. (ICE) made a hostile bid of about $11.3 billion for NYSE Euronext, trying to snatch the owner of the New York Stock Exchange away from Deutsche Boerse AG.  As part of the deal, ICE would purchase NYSE Euronext's Liffe futures markets, while Nasdaq OMX would take over its U.S. options markets. The offer represents a 19% premium over a February bid for NYSE Euronext by the German exchange.

Nasdaq OMX and ICE offered $42.50 in cash and stock for each NYSE Euronext share, according to a statement released today. The shares closed at $35.17 yesterday. Deutsche Boerse’s February all-stock agreement to purchase NYSE Euronext values the company at about $35.04 a share.

The union of NYSE Euronext and Nasdaq OMX would join the two largest U.S. exchange operators, giving the combined entity a monopoly for company stock listings in the world’s largest capital market. As part of the deal, ICE would purchase NYSE Euronext’s futures markets, while Nasdaq OMX would keep its U.S. options markets. The Deutsche Boerse deal, valued at $9.53 billion when announced in February, creates the world’s largest exchange operator with venues in the U.S. and Europe.

“The $42.50 sounds great on paper,” said Sachin Shah, a special situations and merger arbitrage strategist at Capstone Global in New York. “But on a practicality level, as Nasdaq and ICE shares trade today and the next few days, as we’ve seen over the past month or two now of how Deutsche Boerse shares have traded, that will determine if the implied value is $42.50 or much lower.”

Sweden, Denmark, Finland

Nasdaq OMX owns 12 equity and options markets in the U.S. and Europe including the Nasdaq Stock Market, Nasdaq Options Market and venues in Sweden, Denmark, Finland, Iceland, Estonia, Latvia and Lithuania. It produced net income of $395 million in 2010, which is 26 percent of the company’s $1.5 billion in net revenue for the year.

NYSE Euronext’s divisions include the New York Stock Exchange, the Euronext platform that handles shares in the Netherlands, Belgium, Portugal and France, and the European derivatives platform known as NYSE Liffe. Income amounted to 22 percent of its $2.5 billion in net revenue.

The Deutsche Boerse deal, valued at $9.26 billion as of yesterday, creates the world’s largest exchange operator. It carries a 250 million ($356 million) breakup fee, increasing the cost of Nasdaq OMX and ICE’s bid by about $1.35 a share, said Sachin Shah, a special situations and merger arbitrage strategist at Capstone Global in New York.

Half of Trading

Combined, NYSE Euronext and Nasdaq OMX would have about 48 percent of U.S. equity trading. They have struggled to keep market share since Kansas City, Missouri-based Bats Global Markets and Jersey City, New Jersey-based Direct Edge Holdings LLC started their own venues about five years ago. NYSE Euronext currently handles 28 percent of equity volume and Nasdaq OMX has 20 percent, according to data from London-based Barclays Plc for the fourth quarter.

CME faces direct challenge from NYSE launch

(Reuters) — NYSE Euronext will launch its long-awaited challenge to CME Group Inc.'s lucrative Treasury futures franchise on March 21, it said on Wednesday.

The launch highlights the importance of the derivatives business to the operator of the world's best known stock exchange, which agreed last month to be taken over by Germany's Deutsche Boerse. The combination would dominate European futures trading, even as NYSE tries to win a foothold in U.S futures, where CME is the biggest player.

Regardless of the ultimate winner in the U.S. market for rates futures, it is already clear the battle could dramatically pare traders' costs.

NYSE's co-owned clearinghouse, New York Portfolio Clearing, will use a cross-margining arrangement with its co-parent, the Depository Trust and Clearing Corp, to slash costs for traders who buy and sell in the cash and the futures market at the same time.

CME, whose Chicago Board of Trade and Chicago Mercantile Exchange units have dominated interest-rate futures since they invented them decades ago, is maneuvering to keep its franchise. On Monday, it put forth a plan to offer cross-margining and save traders money.

CBOT has successfully fended off several challenges to its interest-rate futures business over the years.

CME might pursue NYSE to stave off competitive threat

(Crain's) — CME Group Inc. is not commenting on reports that it might make a hostile counteroffer for NYSE Euronext, but the Chicago-based futures exchange has compelling reasons to keep the Big Board out of the hands of Deutsche Borse, if it can.

A Deutsche Borse-NYSE Euronext combination, which reports said could be announced Tuesday, would be a huge threat to CME. In a business where trading volume drives costs down and profits up, the CME handles 97% of U.S. futures trading, but it would be overshadowed globally by the combination of Europe’s two largest futures exchanges, NYSE Liffe and Deutsche Borse’s Eurex.

CME traded about 3 billion futures contracts last year, while NYSE Euronext and Eurex markets traded a combined 4.8 billion.

"Anything's possible," said Paul Zubulake, senior analyst for futures and options at Aite Group LLC, a financial services market research firm in Boston. "Would it make sense? Sure."

“We don’t comment on rumors or speculation,” a CME spokesman said. Reports on Fox Business News and financial news website theflyonthewall.com suggested CME might make a joint effort with Nasdaq OMX Group to bid for NYSE Euronext.

A tie-up with Deutsche Borse would add strength to NYSE Liffe’s plan to go head-to-head this year with CME in some of its biggest contracts, such as eurodollar and interest-rate futures.

While CME recently won approval for a London-based clearinghouse to help attack the European market, NYSE Liffe plans to launch a clearinghouse in New York for Treasury futures, one of CME’s biggest strengths. NYSE Liffe has teamed up with New York’s Depository Trust and Clearing Corp., which handles trillions of dollars in bond transactions in the cash market.

The ability to trade cash and futures markets in bonds on the same electronic trading platform could provide fast-moving opportunities to play one market off the other at a lower overall cost, creating stiff competition for CME.

“They are concerned about that joint effort,” said Mr. Zubulake. While he has no knowledge of a hostile CME bid for NYSE Euronext, “it makes sense from a big, big, big picture.”

NYSE calls for crackdown on dark pools and their brokers

NYSE Euronext said it will propose to the Securities and Exchange Commission restrictions on dark pools aimed at getting investors better prices on their trades. Duncan Niederauer, CEO of NYSE Euronext, said the SEC should establish rules to govern how a trade is handled by a dark pool when it doesn't quote a price in advance. "They should have a pre-trade transparency-reporting requirement," Niederauer said.

more at http://www.bloomberg.com/apps/news?pid=20601208&sid=agJK1FHOluSs

Hedge funds under investigation for driving down the value of the euro

The US Justice Department has launched an investigation into several hedge funds over allegations they have been working together in an attempt to lower the value of the euro.

People close to the matter told the Wall Street Journal that the department has sent a letter to several funds, including well-known names such as Soros Fund Management and Paulson & Co, asking them to keep hold of their records relating to trading on the euro.

SAC Capital Advisers and Greenlight Capital have also received the communication from the Justice Department, it was reported.

Last week, an article by the paper stated that hedge fund members had met up at a so-called "ideas dinner" in which the falling value of the euro was discussed.

Following the meeting, a research note was leaked which summarized the comments made by one SAC portfolio manager who was in attendance.

"The presenter's way to play this is to short the euro," said the report of the comments.

"Basically the stock market right now is effectively trading on the euro … it's one of the most liquid instruments you can trade."

The unnamed man also predicted that the euro could end up trading at between $0.90 and $1.20 – below its current level of $1.36.

However, insiders told the Wall Street Journal that it may be difficult to prove whether such information sharing constitutes an act of collusion.

"Charges relating to collusion on Wall Street have been a rarity because of the difficulty of proving that firms intentionally sought to act together and acted nefariously," said the paper.

The inquiry comes during a period in which the euro has fallen ten per cent in value since December.

Earlier this week, an unnamed strategist told the Financial Times that hedge funds were profiting from bets on European banks cutting their exposure to the Greek economy.

Exchanges push for price quotes in subpenny increments

Nasdaq OMX Group, NYSE Euronext, BATS Global Markets and Direct Edge, which has yet to gain exchange status, are supporting an effort to get regulators to allow price quotes in increments of less than a penny. The move is part of the exchanges' effort to become increasingly attractive to electronic traders. "We've had institutions, hedge funds, a broad variety of customers asking for this," said Brian Hyndman, senior vice president of transaction services at Nasdaq OMX.

more at http://online.wsj.com/article/SB10001424052748703808904575025271531438864.html

Borsellino wins $11M in suit vs. former NYSE Prez Putnam

(Crain’s) — A Chicago jury has sided with a former trader on the Chicago Mercantile Exchange floor who sued former New York Stock Exchange President Gerald Putnam in a nine-year-old dispute over a business partnership.

The jury awarded Lewis Borsellino $11 million.

“I’m glad the world knows the former head of the New York Stock Exchange is a liar and a cheat,” Mr. Borsellino said after the verdict. Although “disappointed” by the dollar amount of the award — he had sought as much as $100 million — he said he felt “vindicated” by the verdict and the award.

Mr. Borsellino sued Mr. Putnam in 2000, alleging he was cheated out of a stake in a company that Mr. Putnam eventually built into Archipelago Holdings Inc., which later merged with the New York Stock Exchange in a deal that netted Mr. Putnam tens of millions of dollars.

Mr. Borsellino told the jury that he was tricked into selling his share in the firm, Chicago Trading & Arbitrage, for $250,000, less than 1/100th of what he argues it was worth at the time.

Mr. Putnam and co-defendants MarrGwen and Stuart Townsend argued that Chicago Trading & Arbitrage, which they founded with Mr. Borsellino, was completely separate from the enterprise that would become Archipelago, and denied Mr. Borsellino had any right to a stake in that company.

The jury found for Mr. Borsellino against all three defendants.

Jon Loevy, a lawyer for Mr. Borsellino, said he will appeal the judge’s decision not to allow punitive damages.

Mr. Putnam and Mr. and Mrs. Townsend declined to comment as they headed into an elevator on the Daley Center’s 21st floor shortly after the judge thanked and dismissed the jury.

This Day in Wall Street History 1869: NYSE seats up for sale

On this day, the New York Stock Exchange put memberships up for sale for the first time in its 77-year history.

Source: History.com

NYSE Euronext commits to $5 million makeover of trading floor

NYSE Euronext has committed to an 18-month, $5 million face-lift for the 100-year-old trading floor.

The redesign, already under way along the west wall of the Big Board's main trading room, is part of a broader strategic shift at the exchange. The exchange wants to lure more electronic traders directly to the floor, creating a hybrid world where they can take in the person-to-person "buzz" of live traders while still executing trades by computer.

The changes could bring about another big cultural change: Some traders will be able to sit at trading stations that are similar to the kind of desks used throughout Wall Street, instead of standing or perching on stools, as is Big Board custom.

The design also is supposed to help fill big voids on the trading floor. Five years ago, 2,400 people worked on the floor, served by 20 trading "posts" in three different rooms. Today, just 1,200 people work out of two rooms, a void readily apparent when television anchors provide market updates.

The floor of the New York Stock Exchange accounts for only about 17% of daily NYSE stock-trading activity, which equals less than 5% of total U.S. stock-exchange volume.

more at http://online.wsj.com/article/SB125495841401071973.html

NYSE to add partners to bolster options-trading business

NYSE Euronext plans to sell stakes in its NYSE Amex division to major Wall Street firms, including Goldman Sachs Group, Bank of America and Citigroup. The goal is to give major options traders an incentive to trade on Amex, which has seen its market share plummet during the past 10 years. Under the plan, NYSE Euronext would remain the largest shareholder in Amex.

more at http://online.wsj.com/article/SB125245393221794181.html

Citadel to gain stake in NYSE Euronext unit

(Reuters) — NYSE Euronext said on Wednesday it plans to sell a significant stake in its NYSE Amex options unit to seven major Wall Street companies.

As part of the deal, the company has agreed in principle on a framework with BofA Merrill Lynch, Barclays PLC, Citadel Securities, Citigroup Inc., Goldman Sachs Group Inc., TD Ameritrade Holding Corp. and UBS AG, who will become partners in the Amex options unit.

"This partnership will further align our business interests with those of our customers, and makes NYSE Amex options an even more compelling trading venue within an increasingly competitive marketplace," Duncan Niederauer, CEO of NYSE Euronext, said in a statement.

NYSE Euronext said it would continue to manage the day-to-day operations of the unit, which would be operated under the supervision of a separate board and a chief executive officer.

NYSE Euronext said it would remain the largest shareholder in the entity. It expects the transaction to be completed by the end of 2009.

Shares of NYSE Euronext closed at $28.08 Tuesday on the New York Stock Exchange.

NYSE gains momentum in IPO battle with Nasdaq

This year, the New York Stock Exchange has snagged 11 of the 15 initial public offering listings, while Nasdaq has stumbled, according to data from Thomson Reuters. Nasdaq had more than 90% of IPO listings in 1999 and 2000 and a 67% market share as recently as 2007. Analysts suggest the shift in market share may be a result of efforts on the part of NYSE Euronext to establish new benchmarks for listings.

more at

http://online.wsj.com/article/SB125012719965827923.html

NYSE system significantly reduces trade times

NYSE Euronext implemented an order-processing system that allows trade times to fall from 105 milliseconds to five milliseconds. While the change is substantial, rivals, such as Nasdaq OMX and BATS Exchange, still outpace NYSE Euronext. "For [competitors] who have come into the market recently, the barriers of competition are low, so they can come in with the newest technologies and without a lot of the constraints of running a big market," said Louis Pastina, head of NYSE Operations. "This allows us to be very competitive, on a latency basis, with most of our competition."

more at

http://online.wsj.com/article/SB124649953114283829.html

NYSE executes record-low 30% of country's trades in May

The New York Stock Exchange, which has been around for more than two centuries, executed only 30.2% of the nation's stock trades last month, according to data compiled by Bloomberg. Direct Edge Holdings and BATS Exchange -- not Nasdaq OMX -- were the beneficiaries of the shift. "When you are in a purely electronic marketplace, the fact that you're the original or the oldest guy standing doesn't mean anything anymore," said Michael Rosen, a senior vice president at UNX. "The people doing the trading aren't buying the story of the Nasdaq or the NYSE. They just want the fastest and best execution they can get at the lowest price."

more at

http://www.bloomberg.com/apps/news?pid=20601208&sid=amB3bwJD1mLM

NYSE acquires 20% stake in Qatar exchange

NYSE Euronext said it has invested $200 million in a rebranded stock exchange in Qatar.

The move gives the company a foothold in an energy-rich Persian Gulf nation that is trying to bill itself as a regional economic center for the Middle Eastern market.

NYSE Euronext and Qatar Holding, the investment arm of the Qatar Investment Authority, said their partnership will give rise to Qatar Exchange, the successor of the Doha Securities Market.

NYSE Euronext, the parent of the New York Stock Exchange, will provide the technology for the new exchange.

more at

http://online.wsj.com/article/SB124541313352231179.html

NYSE Euronext, Pipeline to launch share-trading facilities

NYSE Euronext is launching today its alternative trading platform called NYSE Arca Europe. Meanwhile, Pipeline, a U.S. operator, will debut its plans for a "dark pool" trading system to launch in the second quarter. The facilities will open as equity markets continue to deteriorate, raising questions about the viability of such platforms.

more at

http://www.ft.com/cms/s/0/68bfa3e2-0c1a-11de-b87d-0000779fd2ac.html?nclick_check=1

NYSE Euronext Takes Qatari Route

With the European and American exchange space becoming increasingly crowded, NYSE Euronext is looking to Qatar for growth.

NYSE Euronext, the world's first transatlantic exchange, announced Tuesday that it was buying a 25.0% stake in the Doha Securities Market in Qatar. The remaining shares will remain in the hands of the Qatar Investment Authority, the world's sixth-largest sovereign wealth fund, and the two partners will build the first derivatives exchange in Doha. NYSE Euronext will also receive three of the eleven seats on the board of directors of the Doha market.

The Doha Securities Market was established in 1995, and has grown rapidly to list 43 companies with a total market capitalization of $136.0 billion, from $5.2 billion, in 2000.

NYSE Euronext owns exchanges across six countries, including the New York Stock Exchange and Euronext, the world's and the euro zone's largest cash equities markets respectively, NYSE Arca Options, an option trading platform in the U.S., and Liffe, a European derivative trading platform.

But Western markets are getting crowded, with alternative trading platforms like BATS denting the dominance of established exchanges in the United States, and the same set to happen in Europe following the introduction of the Market in Financial Instrument Directive last year.