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 here
have been numerous commemorations marking our six-month passage
from Sept. 11, but there is one hero of the aftermath who remains
unsung. Richard Grasso, CEO of the New York Stock Exchange, made
the reopening of the U.S. stock market possible only six days after
the terrorist bombings. And for this he deserves America's praise.
Many financial-industry
executives doubted the reopening was possible in such a short period
of time. But Grasso wouldn't take no for an answer. Somehow, working
round-the-clock, he managed to get the job done.
Grasso, a 35-year
veteran of the exchange, climbed through the NYSE ranks and was
appointed chairman and CEO in 1994. Last September, he displayed
his clear understanding of the larger meaning of the U.S. stock
market. Reopening it without unnecessary delay would send out two
strong messages: First, Grasso believed the American public needed
to see a quick restoration of the symbolic epicenter of our free-market
capitalist system. Second, he believed it was crucial to show the
terrorist enemy that it had failed to shut down the American economy.
Grasso is the
sort of guy who insists on giving credit to others. In an interview
he told me about the instrumental efforts of Verizon, which set
up alternative systems for voice and data transmission, and Con
Ed, which restored the power needed to support stock-exchange activity.
The NYSE's
communications and power systems were located below 7 World Trade
Center, which sat in the shadow of the Twin Towers. Along with the
NYSE, major stock-market firms such as Merrill Lynch, Lehman Brothers,
Salomon Smith Barney, and parts of Goldman Sachs and Morgan Stanley
were crippled when the building collapsed on Sept. 11. But Grasso
related how the utility workers risked their lives by going down
into the Trade Center basement to assess damages and formulate substitute
plans.
Grasso also
cites the helpful efforts of Treasury Secretary Paul O'Neill and
SEC chairman Harvey Pitt, as well as the big brokerage firms that
created a new spirit of cooperation during that fateful week. "It
was a rare moment in our industry when everyone put aside their
competitive juices in order to get the job done," Grasso told
me.
NYSE historians
can find only two other periods in the last century when the exchange
was closed for other than weather-related reasons. In April 1933,
when president Franklin Roosevelt declared a national bank holiday,
the exchange was shut down for eight days. A generation earlier,
the exchange was closed for five months following the advent of
World War I.
Despite the
skeptics, the NYSE resumed trading on Sept. 17, and made history
again. That day, it registered a record 2.3 billion in shares traded,
it's largest volume by more than 150 million shares.
During that
bumpy reopening week, as equity prices temporarily plunged, share
volume averaged 2 billion per day. Since then, of course, the market
has experienced a remarkable rebound. The Dow Jones is up 29%, the
S&P 500 is up 21%, and the Nasdaq Composite is up 36%. In other
words, investor confidence in the future of the U.S. economy and
American business recovered quickly after Grasso et. al. plugged
us back in.
The stock market
remains a leading indicator of the direction of the economy, and
it's top-five advancing groups — information technology, consumer
spending, industrial manufacturing, basic materials, and financial
firms — are signalling a strong economic rebound ahead. The
vile terrorist enemy has failed utterly in its effort to cripple
the U.S., and the American model of free-market capitalism is alive
and well.
This is America's
bull market, but surely Dick Grasso deserves credit as one of its
key drivers.
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