Wall Street is facing a grim question as stock prices plunge on most days with no end in sight: Is it time to shut the market down for a while?
"Maybe close a day or two," Sen. Joe Manchin said on MSNBC on Thursday, raising concerns about so-called short-sellers — those who bet on stocks to fall — taking advantage of the declining market. "It's not an industry that we have to have.
"The Trump administration and regulators have tried to tamp down speculation that trading should be shut down temporarily until the implications of the crisis become clearer, arguing that the markets are functioning as they should amid the regular trading halts, known as "circuit breakers," sparked by dramatic drops in stock prices. "We don't want to be doing that," President Donald Trump said Monday at a White House news briefing, dismissing the need to shut down the New York Stock Exchange or Nasdaq. But every passing day has made the prospect of a halt in trading seem more urgent. If keeping markets open is "a sign of confidence for people," as Treasury Secretary Steven Mnuchin said last week, the deep plunges in stock prices have to undermine that confidence. Tech entrepreneur and former PayPal executive Max Levchin has argued that it might be time to close the markets for a week or two. "Get everyone’s minds to focus on social distancing, expanding testing capacity, vaccine finding ... instead of worrying about the utter collapse of their 401,"Mnuchin conceded that while he wanted the markets to stay open, at least the possibility loomed that trading hours might need to be shortened. That brought a sharp rebuke from New York Stock Exchange President Stacey Cunningham, who said in a television interview that— a sentiment she made clear to multiple administration officials, including Mnuchin. Yet with cases of the virus spreading, the NYSE this week is operating without its signature trading floor and moved to fully electronic trading. "We look forward to the day when we reopen the Floor and welcome back to 11 Wall Street all of the trading floor community, who are so important to the markets we operate,". "Until then, our bell continues to ring and our markets remain open for business." Stocks on the NYSE trade better than on electronic exchanges because of the presence of our DMMs and Floor Brokers. Human judgment combined with the latest technology results in reduced volatility and tighter spreads.The possibility of a market closure underscores the grave outlook for the global economy and the almost complete lack of knowledge of how bad things can get. The markets have shut down before, including during moments of national crisis. Stock trading shut down for several days after the Sept. 11, 2001, attacks. "We had a brief closure after 9/11, but that was because people could not physically get to the trading floors and the [NYSE] was near ground zero," former SEC Commissioner Annette Nazareth said. "Now, virtually all the markets are electronic." But even though much of the market can function without traders on a physical trading floor or even in the office, the prospect of the job being done remotely has also raised concerns. "It's a fair point to say, do we really want people going into all these offices and trying to trade, or alternatively, do we want people making million- and billion-dollar decisions while they're distracted with whatever news is going on, or their kid hopping on their lap?" said Tyler Gellasch, executive director of Healthy Markets and a former SEC official. Still, in television interviews and media briefings in recent days, Mnuchin has been pressed repeatedly about whether it's time to halt trading. Last week, he said "everybody wants to keep it open" after talking to banks and the NYSE, which has warned it could compound market anxiety. "Americans should know that we are going to do everything to make sure that they have access to their money at their banks, to the money in their 401s and to the money in stocks," he said.amid objections from Democrats. Twice in two days it’s failed to move forward.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Stock market live updates: Dow futures down 400, waiting on Congress, 'limit down' againStocks pointed to declines on Monday as investors await a stimulus package from the coronavirus.
Read more »
From Pose to Grey's, See How TV Shows Are Helping OutWith production shut down, TV shows are donating supplies to help medical professionals in need
Read more »
Hedge Funder: Shut the markets down by Squawk Pod
Read more »
Five Ways that COVID-19 Has Rocked the Food IndustryAs COVID-19 spreads and cities shut down, the food system is taking a massive hit.
Read more »
How a private security firm helped 144 stranded North Americans leave Honduras on a jetWith the coronavirus shutting down borders, some turned to former intelligence officers to get home.
Read more »