Why Does the Stock Market Close on Good Friday?
The New York Stock Exchange observes nine holidays each year. Many, such as Christmas Day and Thanksgiving, are recognized by other financial institutions and the federal government. But the NYSE is also closed on Good Friday, when many financial institutions and government offices are open. The reasons behind the closing has prompted some great theories, but only one credible explanation.
Other People Are Reading
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Religion
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Good Friday is primarily a Christian holiday that marks the biblical story of the crucifixion of Jesus Christ. It also usually coincides with the Jewish holiday of Passover. Many believe that the NYSE observes the holiday because of the confluence of those two religious commemorations, writes Elizabeth Fairchild of personalmoneystore.com. Foreign markets, especially in Europe, take several days off around Easter, as well.
A Religious Deal
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Eddy Elfenbein, who writes for crossingwallstreet.com and has worked at the NYSE, says his bosses once told him the day off had to do with an "inter-confessional" deal between Christians and Jews. It makes sense, given the proximity of Good Friday and Passover, but there is absolutely no information to back up that assertion.
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Trade Volume
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Some theorize that because the European markets are closed for Easter, it makes little sense for U.S. markets to be open because the trading volume is much lower than normal days, according to the financial blog kapitall.com.
Bad Mojo?
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Some say traders in the 19th and early 20th centuries became skittish about the date, according to kapitall.com. Fairchild writes that the Panic of 1907 was triggered by a huge sell-off on Good Friday, which prompted NYSE officials to close the markets on that date ever since. The only problem? The panic actually started in October, not the spring.
The Most Logical Reason
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John Forman, who wrote "The Essentials of Trading," provides what appears to be the most logical explanation. Forman, who used to work as a broker, writes that the NYSE has a favorable lease for its property in Manhattan, but the terms require the building to be closed on major Christian holidays, including Good Friday.
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