Digital age puts NYSE traders in limbo

updated 2:01 p.m. ET Feb. 20, 2007

NEW YORK - Michael Rutigliano used to feel like Mickey Mantle each time he stepped on the New York Stock Exchange floor.

The longtime NYSE broker said it "felt like walking on to the field of the Yankee Stadium of the business world, complete with lights, referees, uniforms, hand signals, and scoreboards. There's a palpable energy, a sense you entered the premier business arena in the world."

That arena is in the midst of radical change. The NYSE's iconic trading floor, the emblem of capitalism at work, is hurtling toward an uncharted future as the exchange embraces an electronic age.

NYSE Group Inc., the parent company that operates the exchange, is in the midst of the biggest changes in its 214-year history. The open outcry system where frenzied traders scream "buy" and "sell" has now been replaced by one where transactions are quietly processed by computers.

This new era leaves the Big Board better equipped to compete with the Nasdaq Stock Market Inc. and other electronic trading systems. For traders, the leap into the digital age drastically curtails the need for human interaction and puts all of their jobs on the line.

A once teeming exchange floor is now merely busy as big Wall Street firms cut the number of staff that man stock trading posts. The number of people on the floor has dropped to about 2,100 from 3,000 in a matter of months. Even the wooden trading floor is missing the heaps of paper once strewn across it during the course of a day.

Although layoffs have swept the floor, the need for brokers and other stock specialists is not lost on NYSE Group Inc. Chief Executive John Thain. He maintains there will always be a trading floor, in what the exchange calls a hybrid market that infuses the speed of electronic trading with the experience of seasoned professionals.

"There will continue to be a need for a person involved," Thain said. "I believe the specialist will continue to add value. They are very viable, very competent, and they add value to their customers."

Traders have been clocking into work inside the NYSE's marble columned building for more than a century. Beyond different hours and the introduction of handheld devices used to execute trades, the actual process hasn't changed much the entire time.

They change into colorful mesh-backed jackets, some adorned with buttons of their firm or favorite sports teams, and set to work when the opening bell rings at 9:30 a.m. Orders are filled, trades executed as floor brokers push through stock transactions that now total about 3 billion a day.

Some on the floor follow their fathers and grandfathers into the profession, making stock dealing a family business. Others rise through the ranks from a simple clerk to a broker making more than $1 million a year. All belong to a fabled fraternity.

By 4 p.m., the steady hum comes to a dead stop with the sound of the closing bell. Except these days there are rounds of applause as some depart the building on the corner of Wall Street and Broad Street for the final time.

For decades, they've gone to Suspender's of Wall Street to celebrate big gains and drown their sorrows when the markets plunge. Billy Ahearn, the retired New York City firefighter who owns the bar, said these days it's not uncommon for his regulars to come in clutching pink slips.

On Christmas Eve, the bar was filled with a few dozen patrons who lost their jobs on the NYSE floor. Many confided in Ahearn that they never saw the job cuts coming, and would get out of the business altogether.

It's hurt his business, still recovering from the Sept. 11 attacks.

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