011036 Chicago Merc Swings to A Quarterly ProfitOctober 25, 2001Chicago - The Chicago Mercantile Exchange Inc. said it swung to a quarterly profit from a loss, boosted by rocketing trading volumes amid the U.S. Federal Reserve's interest rate-cutting campaign and a slumping stock market. The exchange, the first U.S. futures exchange to transform itself into a for-profit entity, reported third-quarter net income of $17.6 million, compared with a loss of $3.7 million in the year-ago period. Investors sought shelter in its stock index futures contracts amid the worst quarterly stocks slump in more than a decade. They also traded heavily in interest rate futures, as the Fed kept cutting rates -- including two reductions after the Sept. 11 attacks -- to jump-start the weakening economy. “CME's volume growth is related to the uncertainty that market participants feel about the economy, interest rates and the performance of U.S. stocks,” said Chairman Scott Gordon in a statement. “In this environment, we are seeing greater demand for our risk management products and services.” Revenues more than doubled to $101.9 million in the third quarter from $49.4 million in the same period a year earlier, as clearing and transaction fees also more than doubled. Daily volume in interest rate futures rose 145%, and volume in stock index futures grew 78%. The Merc, founded more than a century ago, offers futures contracts and options primarily in interest rates, stock indexes, foreign exchange and commodities, including pork bellies and lumber.
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