On April 4th, 2007 the New York Stock Exchange (NYSE), the United States’ oldest and largest stock exchange, successfully merged with Euronext, Europe’s second largest stock exchange. The fusion of the NYSE and Euronext marked a significant mechanical transition in financial markets, as well as a drastic change in the functionality of the original NYSE trade building at 11 Wall Street in New York City. Euronext’s stock exchange is an entirely electronic trade medium, meaning that there is zero contiguous interchange between buyers and sellers on its computerized interface. The NYSE, on the other hand, has traditionally been an exchange heavily based on in-person trading and face-to-face communication between buyers and sellers. The major difference between the NYSE of old and the newly merged NYSE Euronext Group is that the latter will “largely keep to the impersonal electronic methods” formerly employed by Euronext (Lowenstein 42). This evolution of the NYSE will only serve to increase the stock market’s reliance upon computerized trade tools, and the immediate economic significance of the NYSE’s Wall Street trade building will inevitably recede into obscurity. Despite its decreasing fiscal necessity, 11 Wall Street will remain a symbol of the financial foundation of New York City and the United States.
The NYSE is the financial bedrock of the United States because it is the oldest private economic institution and stock exchange in the nation. The Exchange was formally founded in 1817, and the current building containing its trading floors was completed in 1903. 11 Wall Street itself is a structure “of the purest Grecian architecture” that is rather “simple in its beauty” (Martin 243). Six marble Corinthian columns supporting a large pediment distinguish the façade of the building. Just prior to the Exchange’s opening, the renowned American sculptors John Quincy Adams Ward and Paul Wayland Bartlett were commissioned to engrave the marble pediment. The sculpture that they collaborated to create is entitled Integrity Protecting the Works of Man, which depicts the “figure of Integrity in the center, with Agriculture and Mining to her left and Science, Industry and Invention on her right, representing the sources of American prosperity” (NYSE). While the appearance of the building is aesthetically exquisite, its location is what truly sets it apart from other financial institutions. The NYSE was cardinally built “in approximately the center of the Wall Street District,” and because of this location the exchange acted as the focal point for the extensive 20th century development of Wall Street’s many economic headquarters (Martin 243). Its prime location and imposing marble facade led 11 Wall Street to become the visual symbol of America’s economic ascendancy.
For its entire existence up until 2007, nearly all of the NYSE’s market operations occurred on the trading floors inside the main trade building. The central trading floor is an enormous space, measuring 109 x 140 feet “with marble walls that rise 72 feet to meet the ornate gilt ceiling,” and it is filled with hundreds of computers, desks, stock tickers, and phones (NYSE). In the past it would not have been unusual to see countless loud, busy traders rushing about the floor calling out and taking stock orders. However, with the creation of NYSE Euronext, from 2007 onwards the NYSE has been “fast morphing into something more like the Nasdaq [the major electronic stock exchange] and radically changing its staid centuries-old traditions” (Ingebretsen 278). USA Today writer Adam Shell writes that in an “aggressive push to embrace technology to stay competitive” the NYSE implemented what it calls a “hybrid system,” a trade medium that is supposed to be a combination of electronic and floor trading (1). However, since the hybrid system’s conception, computerized exchange has decidedly dominated trading.
The burgeoning system has led most financial institutions to strictly use the NYSE’s electronic interface because of their need to keep pace with competing companies. This move to mechanical processing was evidenced in the “first three months of 2007” when “82% of NYSE volume was automatically executed, vs. 19% pre-hybrid” (NYSE). The electronic trading was devastating for in-person floor trading, with the 2006 fiscal year seeing a “49% decrease in floor brokers’ share of total volume” (Shell 2). In this way, the NYSE’s merger with Euronext essentially halved the day-to-day financial operations of the 11 Wall Street trading floors. Furthermore, analysts project that by 2015 contiguous trading will be entirely obsolete and subsequently abandoned by the top global stock exchanges (Lowenstein 41). One clear consequence of market modernization is that, as the title of Adam Shell’s article ominously articulates, “technology squeezes out real live traders” (1). In this new financial environment where complex stock transactions can be easily managed by computer programs, the incentive for enterprising firms to keep floor traders on their payrolls will gradually disappear. The world of stock trading has thereby been totally transformed due to electronically streamlined buying and selling.
Following the evolving market landscape, the economic prominence of the NYSE’s marble landmark at 11 Wall Street has decreased considerably with the emergence of computerized trading. However, despite the curtailed financial activity of the actual building, it remains a key symbol of America’s economic foundations. From the stock market crash of 1929 to the period of prosperity following World War II, the 20th century saw both the lowest economic depression and the largest economic growth in the history of the United States, and the NYSE was at the forefront of all the financial controversy and development of those times (Geisst 67). Especially with the recent economic recession hovering about the nation’s markets, it is now particularly pertinent to remember the history of America’s financial institutions, including the NYSE.
After serving as the very center of Wall Street for over one hundred years, the NYSE undoubtedly retains its value as a New York icon in that the image of Wall Street has become inseparable from that of the NYSE. Furthermore, despite the merger with the European financial giant Euronext, the NYSE trade building at 11 Wall Street was the first of its kind in the United States, and it will therefore always be a truly American symbol of the economic power that this nation possesses now and has possessed in the past. Electronic trading has inalterably changed the economic environment of financial markets and stock exchanges worldwide, but the evolution of computerized trading cannot mitigate the cultural importance of the New York City building that America’s first economic institution has inhabited since the early 1900s.
Geisst, Charles R. Wall Street: A History From Its Beginnings to the Fall of Enron. New York: Oxford University Press, 1997. Print.
Ingebretsen, Mark. Nasdaq: A History of the Market That Changed the World. California: Prima Publishing, 2002. Print.
Lowenstein, Robert. The End of Wall Street. New York: The Penguin Press, 2010. Print.
Martin, H.S. The New York Stock Exchange: A Discussion of the Business Done, Its Relation to other Business, to Investment, Speculation and Gambling. New York: Francis Emory Fitch, Inc., 1919. Print.
NYSE Euronext. The New York Stock Exchange Building. 2010. Web. 9 December 2010. <http://www.nyse.com/about/history/1022743347410.html>
Shell, Adam. “Technology Squeezes Out Real Life Traders.” USA Today. 12 July 2007. Web. 9 December 2010. < http://www.usatoday.com/money/markets/2007-07-11-nyse-traders_N.htm>