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Wednesday, 12 September, 2001, 11:20 GMT 12:20 UK
New York: Global financial centre
Nasdaq ticker
Traders worldwide look to New York for direction
The city of New York plays a central role in world financial markets.

Housing some of the most high-profile markets and investment banks in the world, analysts, traders and economists worldwide turn to New York for clues as to the economic mood.

But with US exchanges shut and the financial district devastated, traders may feel they have temporarily lost the axis on which global markets turn.

Wall Street sign
Wall Street: Hub of global financial trade
The shutdown on the New York Stock Exchange (NYSE), the US's oldest exchange, was the longest since the market shut for two days at the end of World War II.

The NYSE's longest period of closure was nearly four months during World War I.

Market axis

When 24 brokers formed New York's first organised stock market in 1792, the city took its first steps to becoming a financial centre.

Now, London traders quizzed on financial markets frequently say they are "waiting until New York opens" before they can assess direction.

In Tokyo, traders often attribute the day's falls or gains to what happened on Wall Street.

The US is the world's biggest economy, and trade in shares and bonds in the country's corporate giants is predominantly done in New York.

The buzz and glamour of New York financial markets has been captured in several books, including Bonfire of the Vanities and Liars' Poker.

America's love affair with shares - nearly half US households own investments - can partly be attributed to New York's central role in world markets.

Located in the heart of New York's Times Square, Nasdaq's MarketSite Tower soars seven stories high and is the largest video screen in the world.

Number crunching

The figures behind this industry are staggering.

The Securities Industry Association (SIA) estimates that more than $100bn of trades are conducted every day in the US.

Last year saw record trading volumes, boosting brokers' earnings, which rose for the sixth year in a row.

Average daily share volume for the New York Stock Exchange in 2001 is 1.22 billion shares worth, in money terms, about $45bn.

In the US, nearly 800,000 people are employed in financial markets.

Trader dollars

The money earned by traders and spent in the city's wine bars and restaurants and on its extravagantly priced real estate is the fuel for the New York economy.

Earlier this year, New York may have seemed well equipped to withstand the creeping slowdown in the US economy.

But the city's reliance on trader dollars was sure to hit its economy hard, as investment banks started to reduce their headcount.

Another main component of the city's economy was also showing job losses.

Wall Street firms and business services - including companies such as consultancies, accounting and public relations staff - have all been shedding staff.

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