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This Day In Market History: NYSE Launches Decimal Quotes

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This Day In Market History: NYSE Launches Decimal Quotes

Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.

What Happened?

On this day 18 years ago, the New York Stock Exchange began trading in decimal prices rather than eighths of a dollar for the first time.

Where The Market Was

The Dow Jones Industrial Average closed at 11,252.84 and the S&P 500 traded at 1,514.09. Today, the Dow is trading at 26,106.81 and the S&P 500 is trading at 2,898.36.

What Else Was Going On In The World?

In 2000, the Y2K crisis passed without many of the widespread computer failures that had been feared. Microsoft Corporation (NASDAQ: MSFT) released Windows 2000. A gallon of gasoline cost $1.26.

Trading In Cents

For most younger traders, the idea that stock prices trade in decimal format in-line with the dollars-and-cents format of U.S. currency is just common sense. Prior to August 2000, however, that wasn’t the case. Historically, NYSE stocks were quoted in fractional increments of eighths of a dollar, such as $30 and ⅜ or $30 and ½. These fractions may seem strange to today’s traders, but the NYSE originally based its quote system on the Spanish gold doubloon system used in trading for centuries.

Just 13 stocks were the first to adopt the new fractional pricing in August 2000, including six NYSE stocks: Anadarko Petroleum Corporation (NYSE: APC), FedEx Corporation (NYSE: FDX), Forest City Enterprises, Gateway, Hughes Supply and MSC Software.

Fractional trading went smoothly over the first several months, and the NYSE officially switched over all its pricing to decimals on April 9, 2001.

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