NYSE's trading, profit slump; CEO sees market headwinds

Tue Nov 6, 2012 2:52pm EST
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By Luke Jeffs and John McCrank

LONDON/NEW YORK (Reuters) - Investor confidence in U.S. equity markets is at an all-time low due to worries over the global economy and greater market complexity, NYSE Euronext's NYX.N chief executive said on Tuesday after the company reported a 42 percent drop in quarterly profit.

With equity trading levels at their weakest in years - down in the latest quarter by 31 percent in Europe and 39 percent in the United States - the parent company of the New York Stock Exchange has focused on cost reductions to help offset lost revenue.

"I feel about NYSE Euronext the way I feel about the U.S. economy: well positioned to grow under the right conditions, but for the moment, we are still facing strong macro-economic headwinds," NYSE CEO Duncan Niederauer told analysts on a call.

NYSE has cut $82 million in expenses so far this year, easily surpassing its 2012 target of $63 million. The trans-Atlantic exchange operator has pledged to cut $250 million by 2014 and now expects to reach $100 million by year-end.

Even with the sharp drop in expenses, net revenues for the three months ended September 30 tumbled 21 percent to $559 million. Analysts had expected $568.5 million.

Shares of NYSE were down 5.1 percent at $24.30 in New York on Tuesday afternoon.


The move by investors to the sidelines is not a structural shift, but a reflection of concerns over the global economy, Niederauer said.   Continued...

A NYSE Euronext sign is seen over the the floor of the New York Stock Exchange, May 14, 2012. REUTERS/Brendan McDermid