Breaking News

Explainer: How U.S. markets will function if coronavirus breaks out in NYC

EconomyFeb 28, 2020 10:41AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

By John McCrank

NEW YORK (Reuters) - If an outbreak of coronavirus hits New York, it could cause more sharp selling of stocks, but markets would likely continue to function even if the floor of the New York Stock Exchange had to close.

No case has been confirmed in the state, but dozens of people were being checked in the New York City area on Wednesday.

U.S. stock exchanges said they have contingency plans.

Here is how the markets would work if there were disruptions or panic selling of stocks.


Nearly all U.S. stock trading is done electronically, with only Intercontinental Exchange Inc's (N:ICE) NYSE still operating an open outcry trading floor. But even the Big Board can operate fully electronically if the floor needs to be shut.The exchanges said they are monitoring the situation.

"The NYSE is carefully monitoring the spread of COVID-19 and has robust contingency plans, tested regularly, to enable continuous operation of the NYSE exchanges should any facilities be impacted," a spokesman said in a statement.

"Cboe has business continuity plans in place for a wide variety of scenarios that could potentially impact operations," said a spokeswoman for rival exchange operator Cboe Global Markets (Z:CBOE). "We are closely monitoring developments related to coronavirus."

"The safety of Nasdaq employees, vendors, visitors is paramount. We continue to follow the updates and act and communicate accordingly," said a spokesman for Nasdaq Inc (O:NDAQ).


On July 8, 2015, a technical glitch forced the NYSE to suspend trading for several hours, but trading continued as normal on the other 10 U.S. stock exchanges operating at the time.

There are now 13 stock exchanges and another three expected to launch this year, as well as around 30 private stock trading venues run by broker dealers where trading can take place.

In August 2013, a technical problem froze trading in all Nasdaq-listed stocks for three hours, leading the U.S. Securities and Exchange Commission to call for a meeting of Wall Street executives to insure "continuous and orderly" functioning of the markets.


On Oct. 29 and 30, 2012, markets were closed after Superstorm Sandy, the worst storm to hit New York City in nearly 75 years. The NYSE closed its trading floor due to unsafe conditions in lower Manhattan. The exchange had planned to go fully electronic, but with much of Wall Street unprepared for the transition and running on skeleton staffing, traders and regulators felt uncomfortable with the idea and it was shelved. There has been extensive testing since then.

The markets were also closed following the Sept. 11, 2001, terror attacks until Sept. 17 to avoid panic selling.


On Oct. 19, 1987, the Dow Jones Industrial Average plunged 22.6%, after which the SEC mandated market-wide circuit breakers to ease big market declines.

To prevent another 1987-style crash, trading is paused for 15 minutes if the S&P 500 index falls more than 7% before 3:25 p.m. New York time. If the decline continues after trading resumes, before 3:25 p.m., the market is paused again at 13%. If the decline happens after 3:25 p.m., trading continues. But trading is suspended for the session if the decline reaches 20%.


Technology has made it easier for people to work from home, said Doug Clark, a Toronto-based electronic trading executive who has worked for Virtu Financial, ITG, and BMO Capital Markets. Toronto was one of the first places to experience an outbreak of the SARS virus after it spread from China in 2003.

"We were all scrambling," he said. Traders had difficulty accessing all of their trading tools from home, he said, as did exchange executives.

VPN technology has improved greatly since then and working from home is not such a big issue anymore, he said.

The SEC also introduced a rule called Regulation Systems Compliance and Integrity in 2014 to hold exchanges to a higher level of emergency preparedness, and the bourses do regular testing of their backup facilities, said James Angel, a Georgetown University finance professor.

But testing has its limits.

"You can do all the testing you want, but you never know if it's really going to work until you run it for real," Angel said.

Explainer: How U.S. markets will function if coronavirus breaks out in NYC

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
HJ Index
HJ Index Feb 28, 2020 10:57AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
well, i really think US market will be only one standing at the end. the virus is really helping trump to prove his points: closing boarder, get work back to US. no more globalizarion. trump will win 2020.
Stanislav Ivanovskiy
Stanislav Ivanovskiy Feb 28, 2020 10:42AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
More panic please!It is not enough yet.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email
We have a special offer for you