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N.Y. Stock Exchange to Delay Start of After-Hours Trading

By Walter Hamilton
LOS ANGELES TIMES -- New York

The New York Stock Exchange decided Thursday to postpone extending its daily trading hours until at least the second half of next year, despite plans by competitors to roll out after-hours trading as early as this summer.

Backpedaling from earlier indications that it would introduce late trading this year, chief executive Richard Grasso said the Big Board would first focus on Year-2000 computer upgrades and the implementation of a new system to quote stock prices in decimals rather than fractions.

The after-hours saga -- in which the NYSE and Nasdaq both promised late sessions this summer but later backed off to differing degrees -- demonstrates the tremendous unease felt by the established marketplaces.

The NYSE and Nasdaq had shown little interest in late trading until upstarts Eclipse Trading Inc. and Wit Capital Corp. unveiled proposals for individuals to trade stocks after the close of regular market hours, which are 9:30 a.m. to 4 p.m. Eastern time. These companies now run separate markets used by institutional investors and day traders.

The NYSE and Nasdaq, perceiving unprecedented threats to their business, rushed to say they would match their rivals even though neither had specific plans in place.

The National Association of Securities Dealers, which operates Nasdaq, voted last week to add a second daily trading session from 5:30 p.m. Eastern time to either 9 p.m. or 10 p.m. But after saying earlier that it could start late trading by September, it backed off that timetable last week and refused to specify a start date.

Unlike the NYSE, the Nasdaq is thought to face a more immediate threat to its business. That stems in part from Nasdaq’s electronic system, as well as from the fact that it lists many hot high-technology and Internet stocks.

In the first quarter, so-called electronic communication networks accounted for at least 20 percent of the trading volume in Nasdaq-listed stocks, said Bill Burnham, an analyst at Credit Suisse First Boston.

Wall Street firms fear the costs of adding new staff for late trading.