Updated from 10:44 a.m. EST

Wall Street believes the Chicago Mercantile Exchange ( CME) is a hot commodity, as the exchange's newly minted shares soared 22.5% in their market debut.

The initial public offering for the Merc -- the first U.S. exchange to go public -- priced at $35 a share Thursday night, a few dollars above the predicted price. But by the end of the first day of trading, shares of Merc rocketed even higher, to $42.90.

With the stock priced at $35 a share, the IPO generated $165 million. However, because Merc insiders were selling about a quarter of the 4.75 million shares in the offering, only $105 million will go to the exchange.

If the Merc's stock continues to build on its opening day gains, it could persuade other U.S. markets, like the Nasdaq Stock Market and the New York Stock Exchange, to go forward with their own much-talked about IPO plans.

The Merc IPO, which was lead-managed by Morgan Stanley ( MWD), has been two years in the making. And in a market that's been starved for IPOs of profitable companies, investors were eager to get their hands on Merc shares.

Indeed, just more than 5 million shares changed hands Friday -- an amount greater than the stock's entire float. (While it's impossible to say how much of that volume represents the same shares repeatedly traded, the figure would seem to give the lie to notions that early IPO buyers have suddenly become dedicated owners in a postflipping world.)

The enthusiasm for the Merc IPO is understandable. Of all the exchanges in the U.S., few have evolved as spectacularly.

The 104-year-old exchange began as a place for Midwest farmers and merchants to buy and sell futures contracts on everything from pork bellies to eggs. But in recent years, it's become the nation's second-largest trading futures contracts on eurodollars and stock indices.

Over the past two years, the Merc, which posted earnings of $68.3 million last year, has seen a surge in trading activity as recession-wary investors have sought to hedge their bets against changes in interest rates and fluctuations in currency prices.

But the opening-day surge in Merc's stock may give investors looking to buy shares a reason to pause. The stock, based on 2001 earnings, now trades at a price/earnings ratio of 18. That's a valuation nearing the top of the historical range for financial-services stocks.