History of New York Stock Exchange

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The history of the New York Stock Exchanges dates back to the 18th century. The New York Stock Exchange (NYSE) wasn’t the first stock exchange in the U.S., nevertheless.

 

One small fact from history: The first stock exchange was the Philadelphia Stock Exchange; however, the New York Stock Exchange quickly overshadowed the Philadelphia Stock Exchange.

 

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Created by brokers under the spreading boughs of a buttonwood tree, the NYSE made its home on Wall Street. The stock exchange’s location, more than anything else, led to the dominance that the NYSE quickly achieved.

 

It was in the center of all the business and trade coming to as well as going from the country, as well as the domestic base for most banks as well as large corporations. So, by setting listing requirements and demanding fees, the NYSE became a very wealthy institution.

 

It faced very little serious domestic competition for a very long time. The NYSE’s international prestige rose in tandem with the burgeoning American economy, and the NYSE was soon the most prominent stock exchange in the world. Unsurprisingly, it had its share of peaks and valleys during the same period, too.

 

Numerous events affected the New York Stocks Exchange. For example, the 1920 bombing, believed to have been carried out by anarchists, left 38 dead and also literally scarred many prominent buildings located on Wall Street. The less literal scars on the NYSE came in the form of stricter listing as well as reporting requirements.

 

New York Stock Exchange and its rivals

 

On the international scene, London Stock Exchange emerged as the major stock exchange for Europe; however, the majority of companies that were listed internationally were also listed on New York Stock Exchange.

 

Many other countries, including France, Switzerland, Germany, the Netherlands, South Africa, Hong Kong, Japan, as well as Australia, developed their own stock exchanges. Still, these stock exchanges were seen mainly as proving grounds for domestic companies until the companies mentioned above were ready to make the leap to the London Stock Exchange (LSE) and from there to the big leagues of the NYSE.

 

However, some of the above-mentioned international exchanges are still considered dangerous territory because of weak listing rules and less rigid government regulation.

 

In spite of the existence of stock exchanges in Chicago, Los Angeles, Philadelphia, and other major centers, the New York Stock Exchange was the most powerful stock exchange domestically and internationally for a very long time.

 

In 1971, nevertheless, an upstart emerged to challenge the NYSE hegemony. It is noteworthy that the Nasdaq was founded by the National Association of Securities Dealers (NASD). Interestingly, the Financial Industry Regulatory Authority (FINRA) is the successor of NASD.

 

From Nasdaq’s inception, it has been a different type of stock exchange. Nasdaq doesn’t inhabit a physical space, as with 11 Wall Street. Instead, this stock exchange is a network of computers that executes trades electronically.

 

The competition from Nasdaq has forced the New York Stock Exchange to evolve, both by listing itself and by merging with Euronext in order to create the first trans-Atlantic exchange. Euronext became a separate entity several years ago.

 


 

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