The New York Stock Exchange said an outage of more than three hours was caused by problems associated with a software upgrade on the exchange’s computers. Any investors who wanted to buy or sell stocks were able to – and at fair prices.
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The “market status history” update on the NYSE’s site posted Thursday said: “As customers began connecting after 7 a.m. on Wednesday morning, there were communication issues between customer gateways and the trading unit with the new release”.
The broad-based S&P 500 dropped 34.65, or 1.66 percent to 2,046.69, while the tech-rich Nasdaq Composite Index tumbled 87.70, or 1.75 percent, to 4,909.76.
It already hadn’t been a great week in the equities markets, with concerns over Greek debt and the swooning China stock market among other things making headlines.
The New York Stock Exchange stopped trading late Wednesday morning.
A shutdown in trading at one the world’s most famous exchanges raised the tension in financial markets Wednesday.
In May 2010, the Dow Jones industrial average plunged hundreds of points in minutes due to mass selling triggered by computerized trading programs.
“We opened very well…but shortly thereafter we started seeing some anomalies, customers were not receiving all the messages they usually receive”, Farley began.
“Dark pools are just one example of other places to execute stock”, he said in an interview.
There is also a debate whether the July 8 halt in trading will lead to increased calls for action by regulators, such as by the Securities and Exchange Commission (SEC).
This is not a story of people finding that they were unable to trade on the NYSE, freaking out and eventually switching to their backup systems. However, this update to the gateways caused more communication issues between the gateways and trading units. “Consistent with our rules and in coordination with our management team, I made the decision to suspend trading because, given the anomalous behavior of the system, I was not comfortable that our marketplace was appropriate for your listed securities”. The Nasdaq and other exchanges are unaffected by the outage.
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The White House briefed President Barack Obama on the NYSE glitch, but Homeland Security later said both the problems experienced by United Airlines and NYSE were not thought to be the work of cyber criminals. In March 2012, BATS Global Markets, a Kansas company that offers stock trading services, canceled its own IPO after several snafus. Other trades are done electronically.
