The New York Stock Exchange (NYSE) was forced to suspend trading for several hours on Wednesday in the biggest outage to hit a US financial market in nearly two years, unnerving investors already rattled by the meltdown in Chinese stocks and the Greek debt crisis.
The NYSE, a unit of Intercontinental Exchange Inc, reopened at 3:10pm after being halted shortly after 11:30am. The exchange said the outage was due to an internal technical issue and not the result of a cyberattack. Other exchanges were trading normally.
“It’s not a good day, and I don’t feel good for our customers who are having to deal with the fallout,” NYSE president Thomas Farley told CNBC during the halt.
Photo: AFP
The exchange handled 6.12 percent of US stock volume for the day, with much of that coming after the exchange reopened, according to BATS Global Markets statistics. That compares with an average of about 13.4 percent last month.
Traders had awaited the reopening anxiously because much of the exchange’s business happens when portfolio managers put in orders designed to occur at the exact market close to ensure end-of-day pricing.
However, many traders said that it did not matter that the NYSE was down. That is because there are 11 US stock exchanges, including those run by NASDAQ OMX Group and BATS, along with more than 40 private stock-trading venues, so the trading of NYSE-listed stocks was uninterrupted.
“This is one of the rare cases where the fragmented markets we live in actually serve a purpose,” FactSet Research Systems exchange-traded funds director Dave Nadig said. “If this happened at [the London Stock Exchange], you would just be sitting staring at a blank screen.”
The NYSE had been experiencing technical issues even before the market opened. The exchange had said it was experiencing connectivity problems that might have prevented some of its customers from getting acknowledgements on orders submitted in some 220 stocks.
The exchange’s glitch came on the same day that computer problems led United Airlines to ground all its flights for about two hours and the home page of the Wall Street Journal’s Web site temporarily went down.
The US Department of Homeland Security said there were no signs that the problems at the NYSE and United Airlines stemmed from “malicious activity.”
The US Securities and Exchange Commission on Wednesday said that it was closely monitoring the situation at the exchange. The White House said US President Barack Obama had been briefed on the matter.
Nearly all US trading is done electronically, and the NYSE’s outage again raised questions about the robustness of the technology at exchanges after a raft of major glitches in recent years.
The NYSE accounts for more than 60 percent of S&P 500 volume at the close of the market, Credit Suisse analyst Ana Avramovic said.
“If you don’t have all the orders on that marketplace on the close, the pricing on the close would be definitely not accurate,” Empire Executions Inc president Peter Costa said.
The benchmark S&P index closed down 1.7 percent on Wednesday, as investors continue to focus on turmoil in China and Greece.
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