Yahoo Finance CME Group to Close Trading Floor Amid Coronavirus Outbreak
CME Group Inc. CME will shut down its Chicago trading floor temporarily after business hours on Friday. The trading floor will remain closed till Mar 13, 2020.
This decision was taken as a precaution to limit large gatherings, which can lead to the spread of the coronavirus. However, trading of future contracts like gold and other commodities, which can be handled electronically, will continue on CME's electronic trading platform, Globex.
In the Chicago Board of Trade building, no cases related to coronavirus have been reported so far. The trading floor will remain closed until more medical guidance is available on the coronavirus.
With this declaration, CME becomes the first major U.S. exchange to shut a trading floor to avoid the spread of the coronavirus.
The World Health Organization declared the disease caused by the coronavirus, COVID-19, a pandemic. Global coronavirus cases have risen above 124,000. The United States now has more than 1,000 people infected with the coronavirus along with more than 30 deaths.
CME's shares ended the session down nearly 6% lower at $194.68 on Wednesday. The shares traded further 0.86% lower at $193.01 in the after-hours session. The market capitalization of CME Group was $69.7 billion as of the close of trading on Wednesday.
Also, the Dow Jones Industrial Average dropped more than 1,400 points and fell into a bear market from a recent peak of at least 20%, after coronavirus was declared a pandemic. Nasdaq 100 Futures were also sharply lower. All 11 S&P stock market sectors turned negative on Wednesday. S&P futures were down 4.9%. The Asian markets and U.S. stock futures also fell sharply.
The New York Stock Exchange has also taken precautionary measures to lower the risk of coronavirus. It has separated traders on the floor of its iconic 11 Wall Street building and employees of the NYSE and its parent Intercontinental Exchange Inc.
CME Group boasts the largest futures exchange globally in terms of trading volume as well as notional value traded. CME group leads with about 90% market share of the global futures trading and clearing services. The company also remains focused on expansion of futures products in emerging markets, non-transaction related opportunities and OTC offerings.
Shares of this Zacks Rank #3 (Hold) company have rallied 14.7% in the past year, underperforming its industry's increase of 18.1%. Nonetheless, the company’s policy to ramp up its growth profile and capital position should continue to drive shares higher.
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