Top NYSE Stocks

Today, the New York Stock Exchange is known as the center of the financial universe. However, the exchange’s origin is far more humble. On May 17, 1792, 24 stockbrokers signed the Buttonwood Agreement creating a centralized exchange to help provide order to the securities market in what was still a young nation. The "Buttonwood Agreement” comes from the tree of the same name under which the founders signed the agreement. 

An initial benefit of the exchange was how it removed the need for auctioneers when trading commodities like wheat and tobacco and to set a commission rate. The exchange initially focused on government bonds.  

However, the exchange had no formal home. Business was usually conducted informally in the local coffeehouses. In 1817, the exchange changed its name to the New York Stock & Exchange Board which later became the New York Stock Exchange. At this time, the exchange adopted a constitution that set the rules for trading. A group of stockbrokers met twice a day at 40 Wall Street to trade 30 stocks and bonds.  

Over time, the exchange moved became the financial hub of the country and moved to its current location in 1865.  

As of June 2022, the NYSE includes approximately 2,400 companies with a market capitalization of over $28.2 trillion. Although the NYSE trades stocks of all market capitalizations, it’s best known for trading the stocks of large cap companies. These have the benefit of being mature companies in mature industries. And many of these companies reward shareholders with dividends. 

However, that also means that many of these companies are better suited for value investors as opposed to growth investors. In bear markets this stability can be a benefit for investors as these stocks tend to perform “less bad” than more volatile stocks. But in a bull market, these stocks are not likely to provide investors with the growth that they look for. 

An interesting fact about how the NYSE and NASDAQ operate is that the companies with the five largest market caps on the NYSE are also listed on the NASDAQ exchange.  

The NYSE has strict guidelines that govern the types of companies that can list on the exchange. Here are the major requirements that all companies must meet:  

The company must have at least 2,200 shareholders 

The company must trade over 100,000 shares per month  

The company must have a market valuation of over $100 million 

The company must generate more than $75 million in annual revenue 

However, there is at least one advantage of having such stringent requirements. That is the companies that meet the requirements generally find it easier to get more investors funds when they hold their initial public offering (IPO).  

Once a company begins trading on the NYSE, it must continue to meet these requirements. If it doesn’t it can be delisted. In addition to these requirements, the stock must continue to trade above $1. If the price of a stock drops below $1 for more than 29 consecutive trading days, the stock receives an Initial Price Violation Notice.  

At that point, the company has 10 days to provide the exchange with a plan for bringing their shares above $1.  

For over a century, the floor of the NYSE was the place for investors to be. This meant trades were conducted by traders who ran buy and sell orders across the trading floor looking to broker a deal for their clients. But with the birth of the NASDAQ exchange in 1971, the New York Stock Exchange began conducting electronic trading. 

However, the NYSE continues to conduct trades in an auction style. Brokers purchase stocks on behalf of their clients or firms. Every order features a broker who will enter the order electronically and a specialist who serves as the market maker for that stock. The specialist posts bid and ask prices and manages the actual execution of the trades. And there are still a handful of stockbrokers who still traffic buy and sell orders physically on the floor of the exchange.  

Like its counterpart, the NASDAQ, the NYSE measures the risk appetite of investors. When the NYSE is moving higher over a length of time, it signals that a “risk on” environment. Conversely when the NYSE moves lower over a significant period, it signals that investors are moving to a “risk off” position.