New York Stock Exchange chairman JohnPhelan said the stock market underwent a significant correction
today but he did not characterize it as a crash. He also said
the NYSE will open tomorrow on time.
    "The market underwent a significant fall and a significant
devaluation of assets of which we are all concerned," he said.
    Speaking to reporters, Phelan listed several reasons why
the market fell today. He said stocks have been going up for
five years without a correction. He also blamed inflation
fears, rising interest rates, a lower dollar and problems with
Iran. "All came together in a very nervous market" he said.
    "It's the nearest thing to a meltdown that I ever want to
see," Phelan said. Phelan said what he meant by meltdown was a
snowballing effect where selling fed on itself.
    Phelan said the NYSE is going through its standard
procedures before trading begins tomorrow. Those procedures
include checking with member firms on their liquidity, margin
positions, and backlog. "We know of no firm that has a
significant problem, but that could change at any moment," he
said.
    Asked for advice for the average investor, Phelan said, "We
do not know where the market will end up."
    The Dow Jones Industrial average declined a record 508
points to 1738.74. Volume was a record setting 605 mln shares,
almost double the previous record.
    Phelan, in response to a question on declines in foreign
markets, said he believes there is no loss of confidence in the
global economy. He added that the underlying fundamentals of
the U.S. economy are still strong, and that corporate earnings
also continue to be firm.
    Phelan explained today's record descent as being the result
of a confluence of factors, including the globalization of
markets and the proliferation of new securities instruments.
    Those two factors alone have made the market more volatile,
he said.
    Phelan also said a major factor in the decline was the fact
that there has been no major correction in the five-year bull
market. He also pointed to rising tension in the Mideast Gulf.
    The New York Stock Exchange was in constant contact with
the Securities and Exchange Commission about a possible halt in
all trading on the exchange, Phelan said. "The consensus was
that it is better to let the market try to work itself out," he
said.
    In addition, Phelan said that with the global nature of
trading there is no guarantee that halting trading on the New
York Stock Exchange would have served any purpose. Phelan said
he was in contact with the Treasury department, White House and
the Federal Reserve, but that the contact was made as a matter
of routine.
 Reuter
