What Is Wall Street?
Wall Street is a street located in the lower Manhattan section of New York City and is the home of the New York Stock Exchange or NYSE. Wall Street has also been the historic headquarters of some of the largest U.S. brokerages and investment banks.
Understanding Wall Street
Today, the term Wall Street is used as a collective name for the financial and investment community, which includes stock exchanges, large banks, brokerages, securities, and underwriting firms. Today, brokerages are located in various locations while providing access to the same information available to Wall Street's tycoons.
- Wall Street is a street located in the lower Manhattan section of New York City that is the home of the New York Stock Exchange or NYSE.
- Wall Street has also been the historic headquarters of some of the largest U.S. brokerages and investment banks.
- Today, Wall Street is used as an umbrella term to describe the financial markets and the companies that trade publicly on exchanges throughout the U.S.
Wall Street got its name from the wooden wall Dutch colonists built in lower Manhattan in 1653 to defend themselves from the British and Native Americans. The wall was taken down in 1699, but the name stuck.
The Wall Street area became a center of trade in the 1700s, but it didn't become famous for being America's financial center until 1792 when 24 of the United States' first and most prominent brokers signed the Buttonwood agreement. The agreement outlined the common commission-based form of trading securities. Some of the first securities traded were war bonds, as well as banking stocks such as First Bank of the United States, Bank of New York, and Bank of North America.
Wall Street didn't become famous for being America's financial center until the Buttonwood agreement was signed, which eventually formed the New York Stock and Exchange Board. Today, the NYSE is still located at 11 Wall Street.
The NYSE came later. In 1817 the Buttonwood agreement, which got its name because the agreement occurred under a Buttonwood tree, was revised. The organization of brokers renamed themselves as the The New York Stock and Exchange Board. The organization rented out space for trading securities, in several locations, until 1865 when they found their current location at 11 Wall Street.
After World War I, Wall Street, and New York City surpassed London to become the world's most significant financial center. Today, Wall Street remains the home of several important financial institutions. The New York Stock Exchange is still found on Wall Street, as is the American Stock Exchange, and several banks and brokerages.
Wall Street Versus Main Street
While Wall Street often refers to the global finance and investment community, it is often compared and contrasted to Main Street. The term Main Street is often used as a metaphor for individual investors, small businesses, employees, and the overall economy. Main Street is a common name for the principal street of a town where most of the local businesses are located.
There is often a perceived conflict between the goals, desires, and motivations of Main Street and Wall Street. Wall Street tends to represent big businesses and financial institutions, while Main Street represents the mom and pop shops and small companies.
Today, Wall Street is used as an umbrella term to describe the financial markets, and the companies that trade publicly on exchanges throughout the U.S. Although Wall Street is an important location where a number of financial institutions are based, the globalization of finance has led to many financial institutions being established around the world.
Wall Street is often shortened to "the Street," which is how the term is frequently used by those in the financial world and in the media. For example, when reporting a company's earnings, an analyst might compare a company's revenues to what the Street was expecting. In this case, the analyst is comparing the company's earnings to what financial analysts and investment firms were expecting for that period.