NYSE gets facelift, its future unknown

NEW YORK (AP) – What do you do when a cathedral of capitalism becomes antiquated? You turn it into New York’s best party space.

The New York Stock Exchange has lost most of its famous shoulder-to-shoulder bustle in the age of computerized trading. So it’s hoping its status as an icon of American finance will be a popular draw for cocktail receptions, analyst presentations and other festivities.

The exchange, where traders have nervously watched tickers and shouted orders for more than 100 years, is already available for some events. It wants to expand to 1,000 a year, double the number from three years ago.

Think black tie, not Black Monday.

“Planners are always looking for something that’s different and unique, and there’s only one stock exchange,” said Ken Edwards, an executive at SmartSource Rentals who serves as the president of the New York chapter of a national meeting planners organization. “From an experience standpoint, that it’s getting a facelift now is an absolute sign that they think that there’s a recovery going on.”

In addition to the trading floor, the exchange rents out updated meeting spaces to companies and charities. They include vaulted-ceiling dining rooms and a lounge with gilt-edged walls that used to be a club for stock traders. Company officials wouldn’t say what they were spending on the renovations, which are expected to be finished by the end of next year.

It’s a renovation borne out of necessity. Hosting meetings is a small part of the company’s overall profits, but shows how far the building has come from its days as the center of the daily churn global capitalism. Since the last renovation of the building in 1995, the business model of the stock exchange has changed drastically.

Fewer traders than ever actually work on the floor. Steven Grasso, the director of institutional sales at Stuart Frankel & Co., compared stepping onto the floor of the New York Stock Exchange for the first time in 1994 to walking out of the dugout at Yankees Stadium. Traders stood shoulder to shoulder on the trading floor, screaming at each other and into telephones, their feet littered with discarded orders.

“Now, I can do more with my hand-held device than I ever could back then,” he says, swinging his arms wide on the trading floor.

No other trader was within 10 feet of him.

There are a couple of strategic reasons for the renovation, which comes while the company’s future is uncertain. NYSE Euronext Inc. agreed in February to be acquired by a German exchange operator. Last week, however, its longtime domestic rival Nasdaq OMX Group Inc. announced that it had teamed up with derivatives operator IntercontinentalExchange Inc. to offer a 19 percent higher bid. Both proposals are still pending.

NYSE Euronext gets more and more of its profits from companies that list their shares on the exchange or rent out its rooms. The company brought in $3.1 billion in revenue from trading last year, down from $3.5 billion two years ago and the second year of decline. That figure includes both the conventional trading of stocks but also the far more lucrative business of trading more exotic financial instruments like options and futures contracts.