New York Stock Exchange (NYSE)
History of the New York Stock Exchange :
The New York Stock Exchange began in 1792 as a result of the Buttonwood Agreement, under which several brokers agreed to trade securities for commissions. At this time there were only five securities traded in NYC, three of which were government bonds created to finance the Revolutionary War. The other two were bank stocks, with Bank of America as the first listed stock on the NYSE. The exchange began to grow in the early 1800s and in 1817 a constitution with stock exchange rules and regulations was developed. The organization was given a formal name, the New York Stock & Exchange Board, and office space was rented on Wall Street. The name was changed to the New York Stock Exchange in 1863.
In 1865 the NYSE moved to a permanent location on Broad Street. In 1872 the concept of the specialist was born, as the NYSE implemented the continuous trading system. The first set trading hours were established in 1873, with the exchange open from 10 am to 3pm Monday thru Friday and 10 am to noon on Saturdays. These hours have been changed several times over the years, with the exchange's current hours set in 1985.
The NYSE grew rapidly through the 1800s, and was trading a million shares per day by 1886. In 1896 the Wall Street Journal began publishing the Dow Jones Industrial Average with a starting value of 40.74. The Dow was initially comprised of twelve stocks and became an overall indication of the NYSE's daily performance. The 1920s marked a period of great stock market expansion, with the Dow growing from 60 to its 1929 peak of 381.17. This changed with the stock market crash on October 27th, 1929, when the Dow fell to 145 by November. The Dow didn't fully recover for 25 years, unable to surpass its pre-crash peak until 1954. After another significant drop in the Dow in 1987, the NYSE implemented the 'circuit breaker' rule to avoid crashes in the stock market. If the stock market falls 10, 20, or 30 percent at any time, trading will be stopped for an hour, two hours, or the rest of the day, respectively. Despite several significant drops in the market over the years, in 2000 the Dow reached its all time high of 11,722.98.
In 2005 the NYSE announced its plan to become a publicly held company through a merge with the electronic stock exchange Archipelago. The new exchange will be a hybrid, utilizing both floor and electronic trading. This is considered a crucial move, as most markets around the world are now electronic and this will help the NYSE compete and remain one of the top stock exchanges in the world.