The year's events in the financial markets were overshadowed by the Sept. 11 terrorist attacks, which closed U.S. equities markets for four days. While the Exchange's staff, facilities, and trading systems were not directly affected, major effort was required to overcome the collateral damage to the area's infrastructure, in particular restoring data and phone connectivity.
On Sept. 17, the day of re-opening after the attacks, the Exchange set record daily share volume of 2.37 billion shares, topping the prior record of 1.56 billion shares by more than 800 million shares. The successful re-opening, with flawlessly operating systems, was largely due to around-the-clock work of NYSE technology and personnel, and an extraordinary partnership among the securities industry, city, state and federal governments and the New York utilities.
NYSE member firms, specialist firms and listed companies, amongst others, offered their support to the victims' families, donating millions of dollars to the NYSE Fallen Heroes Fund and other charitable organizations. The board of directors of the NYSE Fallen Heroes Fund said it expects to provide more than $8 million to the families of the Fire Department of New York, New York Police Department, and New York and New Jersey Port Authority Police Department firefighters and police officers who lost their lives in the attack, honoring its commitment to give $20,000 to the surviving spouses and dependent children, or related charities.
By moving ahead with their NYSE listings as planned, a large number of companies, particularly from abroad, demonstrated their confidence in the U.S. equities marketplace. On the day of the re-opening, Advantest Corp. (ATE), a Japanese technology company, listed its shares on the NYSE, followed the next day by Cemig (CIG) from Brazil and Suez (SZE) from France. Other companies to list that same week were Buhrmann NV (BUH) from the Netherlands, and Irwin Financial Corporation (IFC), a Nasdaq transfer.
For the Exchange, the world's largest and most technologically advanced equities market, the year was highlighted by record-breaking activity as trading volume soared to unprecedented levels. Eight of the 10 most-active months in the NYSE's history occurred in 2001, as well as the top 10 most active days and weeks. In the week of Sept. 17, volume topped 10.5 billion shares, nearly twice the normal volume and an all-time record. In 2001, there were only 31 days when daily volume was less than 1.0 billion shares, and on five days share volume was greater than 2.0 billion shares. The total value of shares traded was $10.5 trillion, compared with $11.1 trillion in 2000. Trading volume for non-US stocks in 2001 was $786.2 billion. Total non-U.S. share volume was 29.0 billion shares or a record 117.4 million shares daily.
The NYSE Composite Index reached 666.57 on Feb. 1, 2001. It closed this year at 589.80, a decline of 10.2 percent compared with its close of 656.87 in 2000.
With a total of 144 new listings in 2001, compared to a total of 122 in 2000, the strong new listings momentum at the NYSE continued. Several leading technology and telecommunications companies were among the 93 domestic companies to list on the NYSE this year, including E*-Trade Group, Inc. (ET) and AT&T Wireless Services, Inc. (AWE). In total, 23 technology concerns with a combined market capitalization of $171.7 billion listed on the NYSE in 2001. These additions bring the cumulative global market capitalization of technology companies listed on the NYSE to approximately $3 trillion, making it the largest technology market in the world, if it were ranked as a standalone marketplace.
Forty-four domestic IPOs (including closed-end funds) raised $32.0 billion in new equity, including Kraft Foods, Inc. (KFT), at $8.7 billion the second-biggest IPO ever. Other companies to offer large IPOs in 2001 included Agere Systems Inc. (AGR.A), which raised $3.6 billion, Prudential Financial, Inc. (PRU), which raised $3.1 billion, Principal Financial Group (PFG) $1.85 billion, Anthem, Inc. (ATH) $1.7 billion, Accenture (ACN) $1.67 billion, and Reliant Resources (RRI), which raised $1.56 billion. Together, this year's initial public offerings amounted to seven of the 25 biggest IPOs in NYSE history.
Krispy Kreme Doughnuts, Inc., (KKD), the leading IPO on the Nasdaq market in 2000, transferred to the NYSE on May 17, 2001. To celebrate the event, Krispy Kreme built a temporary store outside the Exchange between Wall Street and Broad Streets, serving 40,000 doughnuts.
Fifty-one non-U.S. companies listed on the Exchange this year, bringing the total to 462 from 53 countries. Belgium returned to the group of nations with NYSE listed companies with the Exchange listing of Delhaize Group (DEG). Other major non-U.S. companies to join the NYSE in 2001 included Siemens AG (SI), Deutsche Bank AG (DB), Credit Suisse Group (CSR), Nomura Holdings Inc. (NMR) and Brasil Telecom S.A. (BTM). Eleven IPOs from non-U.S. companies raised $3.8 billion in 2001.
The combined domestic and non-U.S. new listings in 2001 resulted in a total of 2,797 NYSE-listed companies with approximately 342.2 shares available for trading and a total global market capitalization of $15.9 trillion, of which $4.8 trillion is for non-U.S. companies.
This year saw the continued rollout of Network NYSE, the Exchange's portfolio of order-execution services and market information products that provide customers with new choices in accessing the NYSE's unparalleled liquidity and information resources. Several products and services were introduced:
- On Feb. 28, the Exchange started the complete rollout of NYSE Direct+, a high-speed electronic connection for immediate automatic execution of limit orders of up to 1,099 shares, with an average turn-around time of 2.2 seconds. Since its launch, NYSE Direct+ has received up to160, 000 orders a day, resulting in 92,000 fully automatic electronic executions. Average daily orders on NYSE Direct+ totaled 125,000, culminating in an average 70,000 automatic executions a day.
- On March 21, the Exchange introduced NYSE MarkeTrac, a web-based investor tool provided free-of charge featuring a 3-dimensional virtual representation of the trading floor and enhanced market data. This high-tech platform has received very encouraging response and will be developed further going forward.
- March also saw the introduction of the first in a series of initiatives to improve price transparency and communication of market-depth information in a decimal trading environment for NYSE-listed securities, called "Depth Indications" and "Depth Conditions".
- In April, the Exchange began implementing the first phase of Xpress Order, an electronic gateway to satisfy large order requirements, including anonymity, and the growing information needs of NYSE member firms and their institutional customers.
- In June, the NYSE began matching comparison data and providing comparison output on an intra-day basis, relieving the responsibility previously held by the National Securities Clearing Corporation. The enhancement contributes significantly to toward straight-through-processing, shortened settlement cycles, reduced risk and exposure on open trades.
- On Dec. 12, the Exchange received approval from the Securities and Exchange Commission to launch NYSE OpenBook, a new market-data product that will allow subscribers to see information contained on NYSE limit order books. Designed to further enhance the transparency of the NYSE market, OpenBook offers market participants a comprehensive view of the aggregate limit-order volume at every bid and offer price outside the displayed NYSE quote. NYSE OpenBook responds to the demand of broker-dealers and institutional investors for depth-of-market data, stemming in part from the six-fold increase in the number of price points brought about by decimalization. The NYSE expects implementation of the service with market data vendors and users in late January 2002.
- In 2001, the number of traders using NYSE e-Broker doubled to 250 users everyday, transacting 50,000 messages per day, up from 15,000 messages a day last year. E-broker together with other NYSE-initiatives helped to reduce paper on the floor by 25% percent in 2001.
In October, William R. Johnston announced his retirement as NYSE president and COO effective Jan. 2. He will be succeeded by Catherine R. Kinney and Robert G. Britz, who will both have the titles of co-chief operating officer, president and executive vice chairman, and will become members of the Board of Directors.
The Exchange will be closed the following days in 2002: New Year's Day, Jan. 1; Martin Luther King, Jr. Day, Jan. 21; Washington's Birthday, Feb. 18; Good Friday, March 29; Memorial Day, May 27; Independence Day, July 4; Labor Day, Sept. 2; Thanksgiving Day, Nov. 28; Christmas Day, Dec. 25.
View the NYSE 2001 Fact Sheet for a brief review of this past year.
