NYSE WILL CONTINUE TO CURB PROGRAM TRADING
New York Stock Exchange chairman John
Phelan said the NYSE will continue to request that member firms
refrain from using its order-delivery systems for program
trading until the record trading volume slows down.
    He said the firms are free to use other systems to do
arbitrage between stock-index futures and their underlying
stocks. "We are going to continue to get volatility for some
time to come," Phelan told a news conference.
    He said program trading adds liquidity to the market but
"at the extreme that adds to the volatility." He said further
analysis of the issue is needed.
    Phelan said a significant number of corporations had begun
buying back their own stock in a move that helped blue chips
gain back some of Monday's losses.
    Asked how the record decline on Monday and the
unprecedented trading volume affected the financial health of
member firms, Phelan said, "As far as we can tell, member firms
are in good shape."
    He said he expects to appear at a Congression hearing in
Washington later this week that will examine the question of
program trading.
   
    Phelan said NYSE officials were in conference with other
financial leaders and White House chief of staff Howard Baker
for much of the day, adding that "the whole system has been
very supportive."
    He said three or four of the NYSE's specialist firms
required and received help with capital. He said these firms
were no longer having capital problems but did not discuss
specific figures. Asked why some stocks were delayed on opening
while others traded, he said the exchange did not want to keep
the vast majority of the 1500 listed companies from trading.

 Reuter
