NEW YORK - Thirteen U.S. stocks began trading in decimals instead of fractions Monday for the first time in American financial history.
The move was the first step in a government-mandated switch designed to bring the U.S. stock exchanges in line with other world markets.
A stock selling for $35 a share will now be priced at $35.375. Shares that were priced at $50 11/16 will be listed at $50.6875.
''If you can look at a $1 bill and understand what that's made of, then you can understand the new decimalization,'' said investor Reid Scrivner, an Atlanta businessman.
Susan Wyderko, director of the Security and Exchange Commission's office of investor education, said: ''You don't have to translate in your mind any more what is versus 3/16 or .''
Seven stocks on the New York Stock Exchange and six on the American Stock Exchange traded in decimals.
The U.S. markets' use of fractions dates back to the late 18th century, when prices were tied to Spanish currency that used increments of one-eighth.
The world's other major markets and exchanges have been using decimals for years.
NYSE chairman Richard Grasso said Monday's transition was smooth. The second stage will take place next month, when an additional 50 or so NYSE stocks switch to decimals.
''We've not heard of any glitches,'' he said. ''What today tells us is that all of the engineering work has proven itself in real-market conditions, even though it was a slow market.''
Late August is a slow period for the market. Stocks were mixed Monday, with some of the companies involved in the changeover reporting slight gains, others losses.
One company did see a bump in volume: About 47,000 shares of MCS.Sofware Corp. were traded Monday, compared with an average daily volume of about 29,400. MCS.Software which makes engineering software.
The SEC has ordered all U.S. markets and exchanges to fully convert to decimals by April 9. The Nasdaq Stock Market, which has said it needs more time to prepare, is scheduled to begin its decimal phase-in in March.
In addition to making stock prices easier to understand, the change could save investors money by narrowing the ''spread'' - the difference between the price asked and the price bid for a stock.
In a fraction system, the smallest difference is 1/16, or 6.25 cents. The use of decimals will allow that increment to drop to 1 cent.
The spreads did narrow for some of the 13 stocks Monday. At one point, the bid for shares of Federal Express Corp. was $40.87, compared with an asking price of $40.88.
Many newspapers have already converted their stock tables to decimals in anticipation of the shift.
As of Monday, The Associated Press, the primary provider of U.S. newspaper stock tables, will be using only decimal figures. AP had been offering fraction and decimal stock tables.
---
On the Net:
SEC: http://www.sec.gov/rules/othern/decimalp.htm
American Exchange: http://www.amex.com
NY Stock Exchange: http://www.nyse.com/press/decimalization.html
