The Chicago Board of Trade announced it would reopen briefly Wednesday for the first time since crippling floods struck the Loop early Monday.
The CBOT`s announcement late Tuesday capped a day of frenzied activity on LaSalle Street, as banks, brokerage firms and futures markets scrambled to drain their basements, reconnect their electricity and return to business as usual.
The CBOT and its affiliate, the MidAmerica Commodity Exchange, endorsed a temporary plan that will let floor traders and brokers buy and sell futures and options from noon to 2 p.m. Wednesday. The plan also requires all traders and brokers to show up at 5:30 a.m. to check and reconcile trades they made during the brief time markets were open Monday.
Restoration of trading in the CBOT`s popular U.S. Treasury bond and its family of Treasury note futures, whch are used by portfolio managers and commercial banks to hedge adverse swings in interest rates, is expected to open its own flood of investor interest. Money managers are expected to rush to update positons that may have changed in the last 48 hours.
The closing Monday and Tuesday of the CBOT`s grain futures markets triggered broad repercussions. Without a futures market to offset the risk of holding a large quantity of grain, exporters lost overseas business and domestic grain dealers cut bids on fears that prices will fall when the markets reopen.
At the Chicago Mercantile Exchange, officals said all markets would be up and running during normal hours Wednesday. The Merc halted trading at 12:30 p.m. Tuesday in all but two stock-index futures contracts so exchange member firms, traders and brokers could catch up on the clearing and processing of trades they had made earlier.
”Because of the interrelationship between our stock-index products and the underlying equity markets, the decision was made to keep those markets open all day,” said Merc President William Brodsky.
”We understand the need for intermarket cooperation between our markets, those at the Chicago Board Options Exchange and in New York. Big institutional users of these markets want them open simultaneously,” Brodsky noted.
As electricity gradually was being restored to the Loop area Tuesday, many commodity and securities brokerage firms reported that they were coping with the power outages and the trading halts. Many firms shifted business to cash markets in New York or to overseas markets, including the London International Financial Futures Exchange.
The unprecedented trading interruptions at the Merc and the CBOT, market giants that account for more than half the estimated 500 million futures and options contracts traded annually, hurt the nation`s securities exchanges. Volume on the New York Stock Exchange was off Monday, but with the reopening of the Merc for half a day Tuesday, NYSE trading volume soared.
Chicago`s two other exchanges, the Midwest Stock Exchange and the Chicago Board Options Exchange, which are located out of reach of the subterranean flooding, operated without a hitch Tuesday and will be open normal hours Wednesday.
Under the CBOT plan, trading on the exchange`s financial and agricultural floors will take place from noon until 2 p.m. despite floodwaters that continued to fill two subbasements in the landmark skyscraper at the foot of LaSalle Street. However, there will be no night bond trading session.
Limited power, supplied by a temporary line fed into the two trading floors by Commonwealth Edison, will power a handful of elevators, computers and electronic tote boards, a spokesman said. If the session proves successful, all-day trading could take place Thursday.
Earlier Tuesday, Gov. Jim Edgar, CBOT President Thomas R. Donovan, Vice Chairman Dale Lorenzen and other officials took a tour of the CBOT building, which has been sealed shut to all but emergency workers. Two oversized pumps, working non-stop, have helped keep floodwaters about six feet below the CBOT`s first basement, a sprawling area that is home to the investigations and audit department.
Meanwhile, most major downtown banks were able to open their doors to customers Tuesday, but the effects of the flood lingered.
Tellers cashed checks and money sped in and out of accounts through wire transfers. But there was ample evidence of Monday morning`s evacuation:
Computer terminals sat to one side of the lobby at American National Bank, and the waterline at Continental Bank ran up to its C-level subbasement.
Continental used its Canal Street processing center to help four other major Chicago banks process 250,000 checks in time to meet overnight deadlines Monday, a spokesman said. He would not identify the banks.
Executives at Northern Trust Co. and First Chicago Corp., whose main offices were largely unaffected, were confronted with the task of finding temporary work spaces for hundreds of employees whose offices at other buldings were closed.
A decision at First Chicago to print the week`s paychecks as soon as flooding began turned out to be fortuitous, with the payroll department among those displaced.
Citibank, which has so far been unable to reopen its headquarters, plans to open again Wednesday with rented emergency generators. A spokeswoman said its telephone banking service would be partially restored by late Tuesday night.
LaSalle National Bank will probably not be able to reopen its main office at 120 S. LaSalle St. until next week, said Ted Roberts, president of the bank`s corporate owner. Flooding in the building reached electrical equipment, he said.
LaSalle is continuing to operate through branch offices and a makeshift headquarters it established Monday at its computer center near O`Hare Airport. ”As we look around, it`s sort of organized chaos, but it`s working,”
Roberts said.
