At the Exchange: "Controlled Pandemonium"

Even before the opening bell rang, the traders, specialists, clerks and messengers who work on the floor of the New York Stock Exchange sensed that Wednesday would not be an ordinary day. The Federal Reserve Board's decision to raise the prime rate had already rocked the stock market, triggering a frenzied sell-off that had sent the market plummeting by a startling 26 points on Tuesday--the worst setback it had suffered in nearly six years. Now, at brokers' booths and trading stations, everybody was fretting about what worried investors would do next. "We're going to get sellers," said one broker as he strode onto the floor.

His prediction proved correct. As an unseasonable October snowfall swirled outside, a far fiercer storm began to rage inside the exchange. Only minutes after trading opened, brokers were deluged with orders to sell. By the time trading had been under way for an hour, everyone realized that the rush was on. "It's almost a total panic," said a broker whose clients were jamming his telephones in their haste to sell. "More dramatic than anything I've seen since the assassination of President Kennedy. The institutions and banks are selling, but they aren't as dramatic as the public. The public always seems to overreact. They're just calling up and saying, 'Sell my stuff! Get out of my position!'" His experience was not unique. At brokerage houses around the city, investors were trying to cut their losses. By 11:30, only 1 1/2 hrs. after trading began, the Dow Jones average was off by 13 points and falling. "I wouldn't call it panic," said Steven J. Hyman, an independent, or so-called $2 broker. "Let's say it's controlled pandemonium."

Even on a routine and relatively quiet day, the floor of the New York Stock Exchange is like an anthill that has been suddenly kicked open. Men in suits from Brooks Brothers and F.R. Tripler move briskly from booth to trading station, clutching slips of paper. Clerks in blue and tan cotton jackets flit about trying to keep up with orders. Messengers dart in and out of the trading area, while overhead, in symbols seemingly as cryptic as the writing that appeared on the walls of Belshazzar's palace, projectors display the quotations off the stock tapes.

Under the best of circumstances, the exchange floor contains the makings of enough ulcers and coronaries to fill a good-sized hospital. By noon Wednesday, the circumstances were close to the worst ever. "Better get down here," one broker telephoned a friend. "We're going to break some records today."

By early afternoon, the market was down 20 points and the tape, which had already been delayed half a dozen times, was running nearly half an hour behind the trading. As it did so, the tension increased. At one booth, a cheer went up as a stock that had been doing poorly all morning started to rise. The cheer turned to silence and then to boos as the stock, like a plane that has suddenly stalled, winged over and began to fall. At a trading station, a specialist berated a clerk who had just placed a slice of pizza on a pile of papers. "Dammit!" he shouted. "The bottom's falling out of the market, and you're stuffing your face with mozzarella!"

By late afternoon, the situation began to change. Stimulated by the low prices, speculators began to buy back into the market, triggering a technical rally that generated a few faint cheers. "We had to expect some sort of rebound," said Arthur E. deCordova, a specialist in IBM stock.

As the tape fell a full 60 minutes behind trading, everyone understood that history was being made. Finally, as the clock struck 4 and the gong signaled an end to the day's trading, those on the floor celebrated in a time-honored Wall Street tradition. Scooping up armfuls of the paper that lay ankle-deep on the trading floor, they tossed it into the air with a cheer that reflected as much exhaustion as exhilaration.

Their attitude was understandable. Though most had anticipated a big day, few had expected that the volume would approach 82 million shares. Wild Wednesday may have proved costly for a good many investors, but it proved mighty profitable to those who get paid to buy and sell.

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