ROANOKE TIMES
Copyright (c) 1995, Roanoke Times
DATE: Saturday, December 30, 1995 TAG: 9601020040
SECTION: BUSINESS PAGE: A-6 EDITION: METRO
DATELINE: NEW YORK
SOURCE: DAVID E. KALISH ASSOCIATED PRESS
THE NEW YORK STOCK EXCHANGE and its top rival had banner years, but some say the NYSE is losing its edge.
In what has become an end-of-year ritual on Wall Street, the nation's two largest stock exchanges on Friday touted a raft of figures to portray themselves as bigger and stronger than the other.
But even as both markets surged in 1995, the Nasdaq Stock Market came out ahead of the New York Stock Exchange on several key measures of stock market strength. Some observers said the widened Nasdaq lead suggests further inroads by the once fledgling market into the world's pre-eminent stock exchange.
``Last year, it surpassed [the NYSE], but just barely. This year is a bigger move,'' said Michael Lipper, president of Lipper Analytical Services Inc., a mutual-fund research company.
``Most importantly, what is said is the [NYSE] does have meaningful competition.''
Both the New York Stock Exchange and the Nasdaq Stock Market clearly had banner years, spurred by unbridled investor enthusiasm, steady U.S. economic growth and declining interest rates that improved the value of equities.
But some of 1995's positive factors skewed toward Nasdaq. The computerized stock market is a haven for high-technology and smaller companies, precisely the stocks that benefited most from the year's investment boom.
In addition, a rash of corporate mergers in 1995 boosted the stock values of targeted companies, which frequently were smaller firms listing on Nasdaq.
In one key measure, the Nasdaq reported that an average 400 million shares were traded each day of 1995. That surpassed the 346 million shares traded on the New York Stock Exchange floor.
Both were records for the exchanges, but Nasdaq's lead widened. In 1994, the Nasdaq came out barely on top, with an average 295.1 million shares traded daily vs. NYSE's 291.4 million.
Nasdaq also said its share volume topped the NYSE's on 82 percent of trading days, surpassing the 61 percent set in 1994.
In the past, securities professionals have often disputed Nasdaq's share volume figures, saying they are inflated because in many cases both the sale and purchase of a stock are counted - two trades instead of one.
Even assuming the double-counting, though, some experts said the improved lead indicated that more investors were flocking to Nasdaq, whose computerized network allows direct electronic access by investors.
Moreover, Nasdaq's advance comes despite a Securities and Exchange Commission investigation into allegations of price-fixing, suggesting that scandal's taint hasn't muted investor enthusiasm for putting money into Nasdaq-listed companies.
In another important measure, market share of total U.S. stock trading, Nasdaq also strengthened its lead.
In 1995, Nasdaq claimed 52.2 percent of all U.S. stock trading volume, up from 48.8 percent in 1994 and 48.2 percent in 1993.
The NYSE, meanwhile, fell to 45.2 percent from 48.2 percent in 1994 and 48.5 percent in 1993. The share of trading by the American Stock Exchange, a much smaller runner-up, fell to 2.6 percent from 3 percent in 1994 and 3.3 percent in 1993.
But the New York Stock Exchange differed in its own portrayal, saying in a release that it ``continued to strengthen its position as the world's largest equities market ... ''
Backing up its assertion that it is the world's largest equities market, the New York exchange said the market value of all stocks traded on the NYSE rose to a record of nearly $6 trillion in 1995. The Nasdaq market had a record too, but only $1.15 trillion, reflecting the smaller value of companies listed.
In addition, in 1995 62 companies switched their listings to NYSE from Nasdaq, breaking the record 52 set in 1988.
LENGTH: Medium: 74 lines KEYWORDS: YEAR 1995by CNB