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Excerpt from our Wall Street Breakfast, a one-page summary of this morning's key market-moving and stock-moving stories:

UBS, Goldman Threaten NYSE, Nasdaq With Rival Stock Markets [Bloomberg]

Summary: Wall Street's top financial firms are providing more of a challenge to the NYSE and Nasdaq by matching up buyers and sellers directly, thus circumventing use of the exchanges. With the top five firms by volume - UBS, Goldman, Morgan Stanley, Merrill and Lehman - expected to pay nearly $100 million in trading commissions to the NYSE and Nasdaq this year alone, they are looking to avoid the exchanges whenever possible. The firms already steer 12% of their trades into their own internal pools - a move that also allows traders an added level of secrecy - and the number is expected to increase to 18% by 2010. The size of such trades would be large enough to move equity prices were they to take place on the open market.
Related links: Commentary: NYSE: Gains Are Far From AutomaticA Unified, Global Stock Exchange May Be ApproachingExchange Stocks: Beware The Bear.
Potentially impacted stocks and ETFs: NYSE Group (NYSE:NYX), Nasdaq Stock Market Inc. (NASDAQ:NDAQ), Goldman Sachs (NYSE:GS), UBS AG (NYSE:UBS), Morgan Stanley (NYSE:MS), Lehman Brothers (LEH), Merrill Lynch (MER) • ETFs: iShares Dow Jones US Broker-Dealers Ind. (NYSEARCA:IAI), iShares Dow Jones US Financial (NYSEARCA:IYF), iShares Dow Jones US Financial Svc. (NYSEARCA:IYG), Vanguard Financials ETF (NYSEARCA:VFH).

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Source: Wall Street's Top Firms Increasingly Resorting to Internal Trading