New York Stock Exchange Economics 521 Elisa Claire Weaver 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.  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.  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.

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  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

History  May 17, 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, 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  May 17, 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, 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

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.  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.

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  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

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, Dec 28, 2006  Lifetime low October 1974  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, Dec 28, 2006  Lifetime low October 1974

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